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Economy of Algeria
 
 
 

General

Algeria is classified as an upper middle income country by the World Bank. The 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 privatisation of state-owned industries and imposed restrictions on imports and foreign involvement in its economy.

Algeria, whose economy is reliant on petroleum, has been an OPEC member since 1969. Its crude oil production stands at around 1.1 million barrels per day, but it is also a major gas producer and exporter, with important links to Europe. 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. The US Energy Information Administration reported that in 2005, Algeria had 160 trillion cubic feet of proven natural-gas reserves.

Algeria has struggled to develop industries outside hydrocarbons in part because of high costs and an inert state bureaucracy. The government's efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector have done little to reduce high youth unemployment rates or to address housing shortages. The country is facing a number of short-term and medium-term problems, including the need to diversify the economy, strengthen political, economic and financial reforms, improve the business climate and reduce inequalities amongst regions.

Since Roman times Algeria has been noted for the fertility of its soil. A considerable amount of cotton was grown at the time of the US Civil War, but the industry declined afterwards. In the early years of the 20th century efforts to extend the cultivation of the plant were renewed. A small amount of cotton is also grown in the southern oases. Large quantities of a vegetable that resembles horsehair, an excellent fibre, are made from the leaves of the dwarf palm. The olive (both for its fruit and oil) and tobacco are cultivated with great success. The Tell is the grain-growing land. During the time of French rule, its productivity was increased substantially by the sinking of artesian wells in districts which only required water to make them fertile. Of the crops raised, wheat, barley and oats are the principal cereals. A great variety of vegetables and fruits, especially citrus products, are exported. Algeria also exports figs, dates, esparto grass and cork. It is the largest oat market in Africa. Algeria is also known for Bertolli's olive oil spread, although the spread has an Italian background.

The Algerian economy grew by 2.6% in 2011, driven by public spending, in particular in the construction and public-works sector, and by growing internal demand. If hydrocarbons are excluded, growth has been estimated at 4.8%. Growth of 3% is expected in 2012, rising to 4.2% in 2013. The rate of inflation was 4% and the budget deficit 3% of GDP. The current-account surplus is estimated at 9.3% of GDP and at the end of December 2011, official reserves were put at $182 billion. Inflation, the lowest in the region, has remained stable at 4% on average between 2003 and 2007.

In 2011, Algeria announced a budgetary surplus of $26.9 billion, 62% increase in comparison to 2010 surplus. In general, the country exported $73 billion worth of commodities while it imported $46 billion.
Thanks to strong hydrocarbon revenues, Algeria has a cushion of $173 billion in foreign currency reserves and a large hydrocarbon stabilisation fund. In addition, Algeria's external debt is extremely low at about 2% of GDP. The economy remains very dependent on hydrocarbon wealth, and, despite high foreign exchange reserves ($178 billion, equivalent to three years of imports), current expenditure growth makes Algeria's budget more vulnerable to the risk of prolonged lower hydrocarbon revenues.

In 2011, the agricultural sector and services recorded growth of 10% and 5.3%, respectively. About 14% of the labour force are employed in the agricultural sector. Fiscal policy in 2011 remained expansionist and made it possible to maintain the pace of public investment and to contain the strong demand for jobs and housing. Algeria has not joined the WTO, despite several years of negotiations.

In March 2006, Russia agreed to erase $4.74 billion of Algeria's Soviet-era debt during a visit by Russian President Vladimir Putin to the country, the first by a Russian leader in half a century. In return, Algerian President Abdelaziz Bouteflika agreed to buy $7.5 billion worth of combat planes, air-defence systems and other arms from Russia, according to the head of Russia's state arms exporter Rosoboronexport. Algeria also decided in 2006 to pay off its full $8 billion debt to the Paris Club group of rich creditor nations before schedule. This will reduce the Algerian foreign debt to less than $5 billion in the end of 2006. The Paris Club said the move reflected Algeria's economic recovery in recent years.

Overview

Economy - overview : 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 privatisation 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 stabilisation 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.
GDP (purchasing power parity) : $284.7 billion (2013 est.)
GDP (official exchange rate) : $215.7 billion (2013 est.)
GDP - real growth rate : 3.1% (2013 est.)
GDP - per capita (PPP) : $7,500 (2013 est.)
Gross national saving : 45.5% of GDP (2013 est.)
GDP - composition, by end use : household consumption: 33.7%
government consumption: 20.6%
investment in fixed capital: 32.9%
investment in inventories: 8.2%
exports of goods and services: 33.3%
imports of goods and services: -28.7% (2013 est.)
GDP - composition by sector : agriculture: 9.4%
industry: 62.6%
services: 28% (2013 est.)
Labour force : 11.15 million (2013 est.)
Labour force - by occupation : agriculture: 14%
industry: 13.4%
construction and public works: 10%
trade: 14.6%
government: 32%
other: 16% (2003 est.)
Unemployment rate : 10.3% (2013 est.)
Population below poverty line : 23% (2006 est.)
Household income or consumption by percentage share
: lowest 10%: 2.8%
highest 10%: 26.8% (1995)
Distribution of family income - Gini index : 35.3 (1995)
Budget : revenues: $80.55 billion
expenditures: $85.58 billion (2013 est.)
Taxes and other revenues : 37.3% of GDP (2013 est.)
Budget surplus (+) or deficit (-) : -2.3% of GDP (2013 est.)
Public debt : 13.2% of GDP (2013 est.)
8.3% of GDP (2012 est.)
note: data cover central government debt; the data include debt issued by sub-national entities, as well as intra-governmental debt
Inflation rate (consumer prices)
: 3.9% (2013 est.)
Central bank discount rate
: 4% (31 December 2010 est.)
Commercial bank prime lending rate : 8% (31 December 2013 est.)
Stock of narrow money : $92.91 billion (31 December 2013 est.)
Stock of broad money : $140.2 billion (31 December 2013 est.)
Stock of domestic credit : $-4.337 billion (31 December 2013 est.)
Market value of publicly traded shares : $NA
Agriculture - products : wheat, barley, oats, grapes, olives, citrus, fruits; sheep, cattle
Industries : petroleum, natural gas, light industries, mining, electrical, petrochemical, food processing
Industrial production growth rate : 2.5% (2013 est.)
Electricity - production : 46.25 billion kWh (2011 est.)
Electricity - consumption : 33.68 billion kWh (2010 est.)
Electricity - exports : 803 million kWh (2010 est.)
Electricity - imports : 736 million kWh (2010 est.)
Crude Oil - production : 1.875 million bbl/day (2012 est.)
Crude Oil - exports : 1.097 million bbl/day (2010 est.)
Crude Oil - imports : 6,400 bbl/day (2010 est.)
Crude Oil - proved reserves : 12.2 billion bbl (1 January 2013 est.)
Refined petroleum products - production : 571,400 bbl/day (2010 est.)
Refined petroleum products - consumption : 316,400 bbl/day (2011 est.)
Refined petroleum products - exports : 471,900 bbl/day (2010 est.)
Refined petroleum products - imports : 17,270 bbl/day (2010 est.)
Natural gas - production : 82.76 billion cu m (2011 est.)
Natural gas - consumption : 28.82 billion cu m (2010 est.)
Natural gas - exports : 52.02 billion cu m (2011 est.)
Natural gas - imports : 0 cu m (2011 est.)
Natural gas - proved reserves : 4.504 trillion cu m (1 January 2013 est.)
Current account balance : $6.697 billion (2013 est.)
Exports : $68.25 billion (2013 est.)
Exports - commodities : petroleum, natural gas, and petroleum products 97%
Exports - partners : Italy 16%, US 15%, Spain 10.9%, France 8.5%, Netherlands 7.3%, Canada 7.1%, UK 5.1%, Brazil 4.7% (2012)
Imports : $55.02 billion (2013 est.)
Imports - commodities : capital goods, foodstuffs, consumer goods
Imports - partners : France 12.8%, China 11.8%, Italy 10.3%, Spain 8.6%, Germany 5.2% (2012)
Reserves of foreign exchange and gold : $192.5 billion (31 December 2013 est.)
Debt - external : $5.278 billion (31 December 2013 est.)
Stock of direct foreign investment - at home : $25.02 billion (31 December 2013 est.)
Stock of direct foreign investment - abroad : $2.433 billion (31 December 2013 est.)
Exchange rates : Algerian dinars (DZD) per US dollar - 78.77 (2013 est.); 77.536 (2012 est.); 74.386 (2010 est.); 72.65 (2009); 63.25 (2008)
Fiscal year : calendar year
 

 
 

 



 


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