<\/p>\n
The IMF estimated that Algeria\u2019s economy grew by 3.9% in 2025, up from 3.7% in 2024, supported by strong public investment.<\/p>\n
<\/p>\n
Growth is projected at 3.8% in 2026, with higher hydrocarbon prices expected to increase export earnings and government revenue.<\/p>\n
<\/p>\n
However, inflation rose from -2% in September 2025 to 5.2% in April 2026 as food-price declines ended and jewellery prices increased alongside higher gold prices.<\/p>\n
<\/p>\n
The IMF said Algeria\u2019s fiscal deficit remained exceptionally high despite narrowing in 2025. One-off dividend payments from state-owned enterprises and the Bank of Algeria helped reduce the shortfall.<\/p>\n
<\/p>\n
With fiscal reserves depleted, continuing financing requirements increased public debt and reliance on central-bank financing.<\/p>\n
<\/p>\n
Algeria\u2019s current-account deficit also widened sharply as imports increased and hydrocarbon exports declined, contributing to significant foreign-exchange reserve losses.<\/p>\n
<\/p>\n
The IMF Executive Board said large fiscal deficits had \u201ceroded fiscal and external buffers and increased financing pressures\u201d.<\/p>\n
<\/p>\n
Directors called for gradual fiscal consolidation, stronger non-hydrocarbon revenue collection and more efficient public investment.<\/p>\n
<\/p>\n
The current hydrocarbon windfall offered Algeria an opportunity to rebuild fiscal reserves, according to the Fund.<\/p>\n
<\/p>\n
The IMF recommended gradual energy subsidy reform supported by targeted assistance for vulnerable households. Stronger public financial management and a rules-based fiscal framework could also improve expenditure control.<\/p>\n
<\/p>\n
Monetary policy should be tightened if inflationary pressures become more widespread.<\/p>\n
<\/p>\n
The Fund called for low inflation to become a clear monetary-policy anchor, greater operational independence for the Bank of Algeria and strict limits on monetary financing.<\/p>\n
<\/p>\n
Greater exchange-rate flexibility could help absorb external shocks and reduce the widening difference between official and parallel-market rates.<\/p>\n
<\/p>\n
Algerian banks remained liquid, profitable and well capitalised, but high levels of non-performing loans and links among the government, state-owned enterprises and public banks presented risks.<\/p>\n
<\/p>\n
The IMF said deeper structural reforms were needed to improve the business environment, reduce informality and establish fairer competition between public and private companies.<\/p>\n
<\/p>\n
Improved governance, transparency, climate resilience and stronger trade and energy links with Africa and Europe could support diversification and private-sector-led growth.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":38929,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-46151","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Algeria\u2019s economy is expected to maintain strong growth in 2026, but large fiscal deficits, rising public debt and declining foreign-exchange reserves threaten longer-term stability, the International Monetary Fund (IMF) says.","published_date":"","news_description":"Algeria\u2019s economy is expected to maintain strong growth in 2026, but large fiscal deficits, rising public debt and declining foreign-exchange reserves threaten longer-term stability, the International Monetary Fund (IMF) says.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/46151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/46151\/revisions"}],"predecessor-version":[{"id":46152,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/46151\/revisions\/46152"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/38929"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=46151"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=46151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}