Economic overview Algeria, in 36 editions.

The exploitation of oil and natural gas products forms the backbone of the economy. Algeria depends on hydrocarbons for nearly all of its export receipts, about 30% of government revenues, and nearly 25% of GDP. In 1973-74 the sharp increase in oil prices led to a booming economy that and helped to finance an ambitious program of industrialization. Plunging oil and gas prices, combined with the mismanagement of Algeria's highly centralized economy, have brought the nation to its most serious social and economic crisis since independence. The government has promised far-reaching reforms, including giving public sector public-sector companies more autonomy, encouraging private-sector activity, boosting gas and nonhydrocarbon exports, and proposing a major overhaul of the banking and financial systems. In 1988 the government started to implement a new economic policy systems, but to dismantle large state farms into privately operated units. date has made little progress.

The exploitation of oil and natural gas products sector forms the backbone of the economy. Algeria
depends on hydrocarbons for nearly all of its export receipts, about 30% of
government revenues, and nearly 25% of GDP. In 1973-74 the sharp increase in
oil prices led to a booming economy and helped to finance an ambitious
program of industrialization. Plunging oil and gas prices, combined with the
mismanagement of Algeria's highly centralized economy, have has brought the
nation to its most serious social and economic crisis since independence. independence in
1988. The government has promised far-reaching reforms, including giving public-sector companies more autonomy,
privatization of some public- sector companies, encouraging private-sector
activity, boosting gas and nonhydrocarbon exports, and proposing a major
overhaul of the banking and financial systems, but to date it has made little only
limited progress.

The oil and natural gas sector forms the backbone of the economy. Algeria economy,
depends on hydrocarbons accounting for nearly all of its export receipts, about 30% of
government revenues, and nearly 25% of GDP. In 1973-74 the sharp increase in
oil prices led to a booming economy and helped to finance an ambitious
program of industrialization. Plunging oil and gas prices, combined with the
mismanagement of Algeria's highly centralized economy, has brought the
nation to its most serious social and economic crisis since full
independence in
1988. The current government has promised far-reaching reforms, put reform, including
privatization of some public- public sector companies, encouraging private-sector
activity, boosting gas and nonhydrocarbon exports, companies and proposing a major
an overhaul of the banking
and financial systems, system, on hold, but to date it has made only continued efforts to admit private
limited progress. enterprise to the hydrocarbon industry.

The hydrocarbons sector is the backbone of the economy,
accounting for
roughly 57% of government revenues, 25% of GDP, and
almost all export
earnings; Algeria has the fifth largest reserves of
natural gas in the
world and ranks fourteenth for oil. Algiers'
efforts to reform one of
the most centrally planned economies in the
Arab world began after the
1986 collapse of world oil prices plunged
the country into a severe
recession. In 1989, the government launched
a comprehensive,
IMF-supported program to achieve macroeconomic
stabilization and to
introduce market mechanisms into the economy.
Despite substantial
progress toward macroeconomic adjustment, in 1992
the reform drive
stalled as Algiers became embroiled in political
turmoil. In September
1993, a new government was formed, and one of whose priorities
priority was the
resumption and acceleration of the structural
adjustment process.
Buffeted by the slump in world oil prices and
burdened with a heavy
foreign debt, Algiers in 1993 resumed negotiations with the IMF and is
on track to conclude concluded a one-year
standby arrangement with the Fund IMF in April 1994.

The hydrocarbons sector is the backbone of the economy,
economy, accounting for roughly 57% of government revenues, 25% of
GDP, and
almost all export earnings; Algeria has the fifth largest fifth-largest
reserves of
natural gas in the world and ranks fourteenth for oil. Algiers'
Algiers' efforts to reform one of the most centrally planned
economies in the
Arab world began after the 1986 collapse of world
oil prices plunged
the country into a severe recession. In 1989, the
government launched
a comprehensive, IMF-supported program to achieve macroeconomic
achieve economic stabilization and to introduce market mechanisms
into the economy.
Despite substantial progress toward macroeconomic economic
adjustment, in 1992
the reform drive stalled as Algiers became
embroiled in political
turmoil. In September 1993, a new government
was formed, and one
priority was the resumption and acceleration of
the structural
adjustment process. Buffeted by the slump in world
oil prices and
burdened with a heavy foreign debt, Algiers concluded
a one-year
standby arrangement with the IMF in April 1994. Following
a Paris Club debt rescheduling in 1995 and a robust harvest, the
economy experienced a strong recovery and key economic improvements.

The hydrocarbons sector is the backbone of the
economy, accounting for roughly 57% of government revenues, 25% of
GDP, and almost all export earnings; Algeria has the fifth-largest
reserves of natural gas in the world and is the second largest gas
exporter; and it ranks fourteenth for oil.
oil reserves. Algiers' efforts
to reform one of the most centrally planned
economies in the Arab
world began after the 1986 collapse of world
oil prices plunged the
country into a severe recession. In 1989, the
government launched a
comprehensive, IMF-supported program to
achieve economic stabilization
and to introduce market mechanisms
into the economy. Despite
substantial progress toward economic
adjustment, in 1992 the reform
drive stalled as Algiers became
embroiled in political turmoil. In
September 1993, a new government
was formed, and one priority was the
resumption and acceleration of
the structural adjustment process.
Buffeted by the slump in world
oil prices and burdened with a heavy
foreign debt, Algiers concluded
a one-year standby arrangement with
the IMF in April 1994. Following
a Paris Club debt rescheduling in 1995 and
1995, a robust harvest, and elevated oil prices, the
economy
experienced a strong recovery and key economic improvements. Recent
and planned investments in developing hydrocarbon resources are likely
to increase growth and export earnings.

The hydrocarbons sector is the backbone of the
economy, accounting for roughly 57% of government revenues, 25% of
GDP, and almost all export earnings; earnings. Algeria has the fifth-largest
reserves of natural gas in the world and is the second largest gas
exporter; and it ranks fourteenth for oil reserves. Algiers' efforts
to
reform one of the most centrally planned economies in the Arab
world
began after the 1986 collapse of world oil prices plunged the
country
into a severe recession. In 1989, the government launched a
comprehensive, IMF-supported program to achieve economic stabilization
and to introduce market mechanisms into the economy. Despite
substantial progress toward economic adjustment, in 1992 the reform
drive stalled as Algiers became embroiled in political turmoil. In
September 1993, a new government was formed, and one priority was the
resumption and acceleration of the structural adjustment process.
Buffeted by the slump in world oil prices and burdened Burdened with a heavy
foreign debt, Algiers concluded a one-year
standby arrangement with
the IMF in April 1994. Following 1994 and the following year
signed onto a three-year extended fund facility. Progress on economic
reform, a Paris Club debt rescheduling in
1995, a robust harvest, and elevated oil prices, the economy and gas sector
experienced expansion have contributed to a strong recovery and key economic improvements. Recent
and planned investments since 1995. Investments in
developing hydrocarbon resources are likely
to increase maintain growth and
export earnings. Continuing but gradual government efforts to attract
foreign and domestic investment outside that sector seek to diversify
the economy and tackle problems of high unemployment and falling
living standards, problems as yet untouched by the macroeconomic
turnaround.

The hydrocarbons sector is the backbone of the
economy, accounting for roughly 57% 52% of government budget revenues, 25% of
GDP,
and almost all over 95% of export earnings. Algeria has the fifth-largest
reserves of natural gas in the world and is the second largest gas
exporter; it ranks fourteenth for oil reserves. Algiers' efforts to
reform one of the most centrally planned economies in the Arab world
began after the 1986 collapse of world oil prices plunged the country
country into a severe recession. In 1989, the government launched a
comprehensive, IMF-supported program to achieve economic stabilization
stabilization and to introduce market mechanisms into the economy. Despite
Despite substantial progress toward economic adjustment, in 1992 the reform
reform drive stalled as Algiers became embroiled in political
turmoil. In
September 1993, a new government was formed, and one
priority was the
resumption and acceleration of the structural
adjustment process.
Burdened with a heavy foreign debt, Algiers
concluded a one-year
standby arrangement with the IMF in April 1994
and the following year
signed onto a three-year extended fund facility.
facility which ended 30 April 1998. Progress on economic
reform, a
Paris Club debt rescheduling in 1995, and oil and gas sector
expansion have contributed to a recovery since 1995. Investments in
developing hydrocarbon resources are likely to maintain growth have spurred growth, but the
economy remains heavily dependent on volatile oil and gas revenues.
export earnings. Continuing but gradual The government has continued efforts to attract diversify the economy by
attracting foreign and domestic investment outside that the energy sector seek to diversify
the economy and tackle problems of in order to reduce high unemployment and falling
improve living standards, problems as yet untouched by the macroeconomic
turnaround. standards.

The hydrocarbons sector is the backbone of the
economy, accounting for roughly 52% of budget revenues, 25% of GDP,
and over 95% of export earnings. Algeria has the fifth-largest
reserves of natural gas in the world and is the second largest gas
exporter; it ranks fourteenth for oil reserves. Algiers' efforts to
reform one of the most centrally planned economies in the Arab world
began after the 1986 collapse of world oil prices plunged the
country into a severe recession. In 1989, the government launched a
comprehensive, IMF-supported program to achieve economic
stabilization and to introduce market mechanisms into the economy.
Despite substantial progress toward economic adjustment, stalled in 1992 the
reform drive stalled as Algiers the country became embroiled in political
turmoil. In September 1993, a new government was formed, and one
priority was the resumption and acceleration of the structural
adjustment process. Burdened with a heavy foreign debt, Algiers
concluded a one-year standby arrangement with the IMF in April 1994
and the following year signed onto a three-year extended fund
facility which ended 30 April 1998. Progress Some progress on economic reform, a
Paris Club debt rescheduling reschedulings in 1995, 1995 and 1996, and oil and gas sector
expansion have contributed to a recovery in growth since 1995. Investments in
developing hydrocarbon resources have spurred growth, but Still, the
economy remains heavily dependent on volatile oil and gas revenues.
The government has continued efforts to diversify the economy by
attracting foreign and domestic investment outside the energy sector
sector, but has had little success in order to reduce reducing high unemployment and improve improving living standards.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 52% 60% of budget revenues, 25% 30% of GDP, and over 95% of export earnings. Algeria has the fifth-largest reserves of natural gas in the world and is the second largest gas exporter; it ranks fourteenth for oil reserves. Algiers' efforts to reform one of the most centrally planned economies in the Arab world stalled in 1992 as the country became embroiled in political turmoil. Burdened with a heavy foreign debt, Algiers concluded a one-year standby arrangement with Algeria's financial and economic indicators improved during the IMF mid-1990s, in April 1994 part because of policy reforms supported by the IMF and debt rescheduling from the following year signed onto a three-year extended fund facility which ended 30 April 1998. Some progress on economic reform, Paris Club debt reschedulings Club. Algeria's finances in 1995 and 1996, and 2000 benefited from the spike in oil prices and gas sector expansion contributed the government's tight fiscal policy, leading to a recovery large increase in growth since 1995. Still, the economy remains heavily dependent on volatile oil trade surplus, the near tripling of foreign exchange reserves, and gas revenues. reduction in foreign debt. The government has continued continues efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, but has had little success in reducing high unemployment and improving living standards.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the fifth-largest reserves of natural gas in the world and is the second largest gas exporter; it ranks fourteenth for 14th in oil reserves. Algiers' efforts to reform one of the most centrally planned economies in the Arab world stalled in 1992 as the country became embroiled in political turmoil. Algeria's financial and economic indicators improved during the mid-1990s, in part because of policy reforms supported by the IMF and debt rescheduling from the Paris Club. Algeria's finances in 2000 and 2001 benefited from the temporary spike in oil prices and the government's tight fiscal policy, leading to a large increase in the trade surplus, the near tripling of record highs in foreign exchange reserves, and reduction in foreign debt. The government continues government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, but sector has had little success in reducing high unemployment and improving living standards. In 2001, the government signed an Association Treaty with the European Union that will eventually lower tariffs and increase trade.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the fifth-largest reserves of natural gas in the world and is the second largest second-largest gas exporter; it ranks 14th in oil reserves. Algeria's financial and economic indicators improved during the mid-1990s, in part because of policy reforms supported by the IMF and debt rescheduling from the Paris Club. Algeria's finances in 2000 and 2001 2000-03 benefited from the temporary spike in oil prices and the government's tight fiscal policy, leading to a large increase in the substantial trade surplus, surpluses, record highs in foreign exchange reserves, and reduction reductions in foreign debt. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector sector, however, has had little success in reducing high unemployment and improving living standards. In 2001, the government signed an Association Treaty with the European Union that will eventually lower tariffs and increase trade.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the fifth-largest seventh-largest reserves of natural gas in the world and is the second-largest gas exporter; it ranks 14th in oil reserves. Algeria's financial and economic indicators improved during the mid-1990s, in part because of Economic policy reforms supported by the IMF and debt rescheduling from the Paris Club. Club in the past decade have helped improve Algeria's finances financial and macroeconomic indicators. Because of sustained high oil prices in 2000-03 the past three years, Algeria's finances have further benefited from substantial trade surpluses, surpluses and record foreign exchange reserves, and reductions in foreign debt. reserves. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. Structural reform within the economy moves ahead slowly.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the seventh-largest reserves of natural gas in the world and is the second-largest gas exporter; it ranks 14th in oil reserves. Economic Sustained high oil prices in recent years, along with macroeconomic policy reforms supported by the IMF and debt rescheduling from the Paris Club in the past decade IMF, have helped improve Algeria's financial and macroeconomic indicators. Because of sustained high oil prices in the past three years, Algeria's finances have further benefited from Algeria is running substantial trade surpluses and building up record foreign exchange reserves. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. Structural reform within the economy moves ahead slowly.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the seventh-largest reserves of natural gas in the world and is the second-largest gas exporter; it ranks 14th in oil reserves. Sustained high oil prices in recent years, along with macroeconomic policy reforms supported by the IMF, have helped improve Algeria's financial and macroeconomic indicators. Algeria is running substantial trade surpluses and building up record foreign exchange reserves. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. The population is becoming increasingly restive due to the lack of jobs and housing and frequently stages protests, which have resulted in arrests and injuries, including some deaths as government forces intervened to restore order. Structural reform within the economy economy, such as development of the banking sector and the construction of infrastructure, moves ahead slowly. slowly hampered by corruption and bureaucratic resistance.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the seventh-largest eighth-largest reserves of natural gas in the world and is the second-largest fourth-largest gas exporter; it ranks 14th 18th in oil reserves. Sustained high oil prices in recent years, along with macroeconomic policy reforms supported by the IMF, have helped improve Algeria's financial and macroeconomic indicators. Algeria is running substantial trade surpluses and building up record foreign exchange reserves. Algeria has decreased its external debt to less than 10% of GDP after repaying its Paris Club and London Club debt in 2006. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. The population is becoming increasingly restive due to the lack of jobs and housing and frequently stages protests, which have resulted in arrests and injuries, including some deaths as government forces intervened to restore order. Structural reform within the economy, such as development of the banking sector and the construction of infrastructure, moves ahead slowly hampered by corruption and bureaucratic resistance.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the eighth-largest reserves of natural gas in the world and is the fourth-largest gas exporter; it ranks 18th 14th in oil reserves. Sustained high oil prices in recent years, along with macroeconomic policy reforms supported by the IMF, years have helped improve Algeria's financial and macroeconomic indicators. Algeria is running substantial trade surpluses and building up record foreign exchange reserves. Algeria has decreased its external debt to less than 10% of GDP after repaying its Paris Club and London Club debt in 2006. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. Structural reform within the economy, such as development of the banking sector and the construction of infrastructure, moves ahead slowly hampered by corruption and bureaucratic resistance.

The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the eighth-largest reserves of natural gas in the world and is the fourth-largest gas exporter; it ranks 14th 15th in oil reserves. Sustained high oil prices in recent years have helped improve Algeria's financial and macroeconomic indicators. Algeria is running substantial trade surpluses and building up record foreign exchange reserves. Algeria has decreased its external debt to less than 10% 5% of GDP after repaying its Paris Club and London Club debt in 2006. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. Structural reform within the economy, such as development of the banking sector and the construction of infrastructure, moves ahead slowly hampered by corruption and bureaucratic resistance.

Algeria's economy remains dominated by the state, a legacy of the country's socialist post-independence development model. Gradual liberalization since the mid-1990s has opened up more of the economy, but in recent years Algeria has imposed new restrictions on foreign involvement in its economy and largely halted the privatization of state-owned industries. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the eighth-largest reserves of natural gas in the world and is the fourth-largest gas exporter. It ranks 16th in oil reserves. Thanks to strong hydrocarbon revenues, Algeria has a cushion of $150 billion in foreign currency reserves and a large hydrocarbon stabilization fund. In addition, Algeria's external debt is extremely low at about 1% of GDP. Algeria has struggled to develop industires industries outside of hydrocarbons in part because of high costs and an inert state bureaucracy.The bureaucracy. The government's efforts to diversify the economy by attracting foregin foreign and domestic investment outside the energy sector have done little to reduce high poverty and youth unemployment rates. In 2010, Algeria began a five-year, $286 billion development program to update the country's infrastructure and provide jobs. The costly program will boost Algeria's economy in 2011 but worsen the country's budget deficit. Long-term economic challenges include diversification from hydrocarbons, relaxing state control of the economy, and providing adequate jobs for youger younger Algerians.

Algeria's economy remains dominated by the state, a legacy of the country's socialist post-independence development model. Gradual liberalization since the mid-1990s has opened up more of the economy, but in In recent years Algeria the Algerian Government has halted the privatization of state-owned industries and imposed new restrictions on imports and foreign involvement in its economy and largely halted the privatization of state-owned industries. economy. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the eighth-largest 10th-largest reserves of natural gas in the world and is the fourth-largest sixth-largest gas exporter. It ranks 16th in oil reserves. Thanks to strong Strong revenues from hydrocarbon revenues, exports have brought Algeria has a cushion of $150 billion in relative macroeconomic stability, with foreign currency reserves approaching $200 billion and a large hydrocarbon budget stabilization fund. fund available for tapping. In addition, Algeria's external debt is extremely low at about 1% 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries outside of hydrocarbons in part because of high costs heavy regulation and an inert state bureaucracy. emphasis on state-driven growth. The government's efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector have done little to reduce high poverty and youth unemployment rates. In 2010, Algeria began a five-year, $286 billion development program rates or to update the country's infrastructure and provide jobs. The costly program will boost Algeria's economy address housing shortages. A wave of economic protests in February and March 2011 but worsen prompted the country's budget deficit. Algerian Government to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. Long-term economic challenges include diversification diversifying the economy away from hydrocarbons, relaxing state control of its reliance on hydrocarbon exports, bolstering the economy, private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.

Algeria's economy remains dominated by the state, a legacy of the country's socialist post-independence postindependence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world and is the sixth-largest gas exporter. It ranks 16th in oil reserves. Strong revenues from hydrocarbon exports have brought Algeria relative macroeconomic stability, with foreign currency reserves approaching $200 billion and a large budget stabilization fund available for tapping. In addition, Algeria's external debt is extremely low at about 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. The government's efforts have done little to reduce high youth unemployment rates or to address housing shortages. A wave of economic protests in February and March 2011 prompted the Algerian Government to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.

Algeria's economy remains dominated by the state, a legacy of the country's socialist postindependence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy.
Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world and is the sixth-largest gas exporter. It ranks 16th in oil reserves. Strong revenues from hydrocarbon Hydrocarbon exports have brought enabled Algeria relative to maintain macroeconomic stability, with stability and amass large foreign currency reserves approaching $200 billion and a large budget stabilization fund available for tapping. In addition, Algeria's external debt is extremely low at about 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth.
The government's efforts have done little to reduce high youth unemployment rates or to address housing shortages. A wave of economic protests in February and March 2011 prompted the Algerian Government to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. Since late 2014, declining oil prices forced the government to spend down its reserves at a high rate in order to sustain social spending on salaries and subsidies, particularly since the government has been unable to boost exports of hydrocarbons or significantly grow its nonoil sector. In 2015, the Algerian Government imposed further restrictions on imports in an effort to reduce withdrawals from its foreign exchange reserves. The Government also increased the value-added tax on electricity and fuel, but said it would address subsidies at a later date.
Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.

Algeria's economy remains dominated by the state, a legacy of the country's socialist postindependence post-independence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy.
Hydrocarbons have long been the backbone of the economy, accounting for roughly 30% of GDP, 60% of budget revenues, 30% of GDP, and over nearly 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world and is the sixth-largest gas exporter. It ranks 16th in oil reserves. Hydrocarbon exports have enabled Algeria to maintain macroeconomic stability and amass large foreign currency reserves and a large budget stabilization fund available for tapping. while oil prices were high. In addition, Algeria's external debt is extremely low at about 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. Declining oil prices since 2014 have reduced the government’s ability to use state-driven growth to distribute rents and fund generous public subsidies. Algeria’s foreign exchange reserves have declined by more than 40% since late 2013 and its oil stabilization fund has decreased from about $75 billion at the end of 2013 to about $7 billion in 2017, which is the statutory minimum.
The government's efforts Algiers has strengthened protectionist measures since 2015 to limit its import bill and encourage domestic production of non-oil and gas industries. Since 2015, the government has imposed additional regulatory requirements on access to foreign exchange for imports and import quotas for specific products, such as cars, to limit their importation. Meanwhile, Algeria has not increased non-hydrocarbon exports, and hydrocarbon exports have done little declined because of field depletion and increased domestic demand.
With declining revenues caused by falling oil prices, the government has been under pressure to reduce high youth unemployment rates or to address housing shortages. spending. A wave of economic protests in February and March 2011 prompted the Algerian Government Algiers to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. Since late 2014, declining oil prices forced In 2016, the government to spend down its reserves at increased taxes on electricity and fuel, resulting in a high rate modest increase in order to sustain social spending on salaries gasoline prices, and subsidies, particularly since the government has been unable to boost exports of hydrocarbons or significantly grow its nonoil sector. In 2015, the Algerian Government imposed further restrictions on imports in an effort to reduce withdrawals from its foreign exchange reserves. The Government also increased 2017 raised by 2% the value-added tax on electricity and fuel, nearly all products, but said it would address subsidies at a later date. has refrained from directly reducing subsidies, particularly for education, healthcare, and housing programs.
Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.

Algeria's economy remains dominated by the state, a legacy of the country's socialist post-independence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy.
economy, pursuing an explicit import substitution policy. Hydrocarbons have long been the backbone of the economy, accounting for roughly 30% of GDP, 60% of budget revenues, and nearly 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world - including the 3rd-largest reserves of shale gas - and is the sixth-largest 6th-largest gas exporter. It ranks 16th in proven oil reserves. Hydrocarbon exports enabled Algeria to maintain macroeconomic stability and stability, amass large foreign currency reserves reserves, and maintain low external debt while global oil prices were high. In addition, Algeria's external debt is extremely low at about 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. Declining With lower oil prices since 2014 have reduced the government’s ability to use state-driven growth to distribute rents and fund generous public subsidies. 2014, Algeria’s foreign exchange reserves have declined by more than 40% since late 2013 half and its oil stabilization fund has decreased from about $75 $20 billion at the end of 2013 to about $7 billion in 2017, which is the statutory minimum.
Declining oil prices have also reduced the government’s ability to use state-driven growth to distribute rents and fund generous public subsidies, and the government has been under pressure to reduce spending. Over the past three years, the government has enacted incremental increases in some taxes, resulting in modest increases in prices for gasoline, cigarettes, alcohol, and certain imported goods, but it has refrained from reducing subsidies, particularly for education, healthcare, and housing programs. Algiers has strengthened increased protectionist measures since 2015 to limit its import bill and encourage domestic production of non-oil and gas industries. Since 2015, the government has imposed additional regulatory requirements restrictions on access to foreign exchange for imports imports, and import quotas for specific products, such as cars, cars. In January 2018 the government imposed an indefinite suspension on the importation of roughly 850 products, subject to limit their importation. Meanwhile, periodic review. President BOUTEFLIKA announced in fall 2017 that Algeria intends to develop its non-conventional energy resources. Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. Algeria has not increased non-hydrocarbon exports, and hydrocarbon exports have declined because of field depletion and increased domestic demand.
With declining revenues caused by falling oil prices, the government has been under pressure to reduce spending. A wave of economic protests in February and March 2011 prompted Algiers to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. In 2016, the government increased taxes on electricity and fuel, resulting in a modest increase in gasoline prices, and in 2017 raised by 2% the value-added tax on nearly all products, but has refrained from directly reducing subsidies, particularly for education, healthcare, and housing programs.
Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.

Algeria's economy remains dominated by the state, a legacy of the country's socialist post-independence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy, pursuing an explicit import substitution policy.
Hydrocarbons have long been the backbone of the economy, accounting for roughly 30% of GDP, 60% of budget revenues, and nearly 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world - including the 3rd-largest reserves of shale gas - and is the 6th-largest gas exporter. It ranks 16th in proven oil reserves. Hydrocarbon exports enabled Algeria to maintain macroeconomic stability, amass large foreign currency reserves, and maintain low external debt while global oil prices were high. With lower oil prices since 2014, Algeria’s foreign exchange reserves have declined by more than half and its oil stabilization fund has decreased from about $20 billion at the end of 2013 to about $7 billion in 2017, which is the statutory minimum.
Declining oil prices have also reduced the government’s ability to use state-driven growth to distribute rents and fund generous public subsidies, and the government has been under pressure to reduce spending. Over the past three years, the government has enacted incremental increases in some taxes, resulting in modest increases in prices for gasoline, cigarettes, alcohol, and certain imported goods, but it has refrained from reducing subsidies, particularly for education, healthcare, and housing programs.
Algiers has increased protectionist measures since 2015 to limit its import bill and encourage domestic production of non-oil and gas industries. Since 2015, the government has imposed additional restrictions on access to foreign exchange for imports, and import quotas for specific products, such as cars. In January 2018 the government imposed an indefinite suspension on the importation of roughly 850 products, subject to periodic review.
President BOUTEFLIKA announced in fall 2017 that Algeria intends to develop its non-conventional energy resources. Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. Algeria has not increased non-hydrocarbon exports, and hydrocarbon exports have declined because of field depletion and increased domestic demand.