Against the backdrop of the International Monetary Fund (IMF) lowering its global forecasts due to trade wars and rising protectionism, Algeria is showing remarkable resilience. The country is among four Arab economies that, according to the IMF, are expected to maintain positive momentum despite the worsening global outlook.
According to the latest IMF World Economic Outlook report, Algeria’s GDP is projected to grow by 3.5% in 2025 — 0.5 percentage points higher than previous forecasts. In monetary terms, the forecast has been revised upward, with GDP expected to reach $268.89 billion, $8.89 billion more than last year’s estimate. Within Africa, Algeria is now firmly positioned as the third-largest economy, trailing only Nigeria and South Africa.
Diversification Success: From Hydrocarbons to Non-Oil Exports
For decades, Algeria’s economy remained heavily reliant on the oil and gas sector, which accounted for over 90% of export revenues. However, in recent years, the country has embarked on major economic diversification reforms. According to the World Bank, Algeria’s non-oil exports reached $5.1 billion in 2023 — three times the level in 2017.
Today, fertilizers, steel products, and cement have become key pillars of Algerian exports. This reflects early success in expanding the country’s economic base and reducing dependence on hydrocarbon prices.
Reforms and Investment Climate
The World Bank highlights Algeria’s “bold course” toward economic renewal. Key reforms include modernization of port infrastructure, a new investment law aimed at improving conditions for private and foreign capital, and measures to boost external trade efficiency.
These efforts are already bearing fruit: the second half of 2024 saw growth in foreign direct investment and increased non-oil export volumes. Such progress allows experts to view the country’s prospects with cautious optimism.
Algeria in the African and Arab Context
Algeria ranks among the top three African economies and stands out for its resilience compared to some neighbors. For example, Sudan is forecast to see a 0.4% contraction in 2025, while Iraq is expected to face a 1.5% GDP decline.
Outlook
Algeria’s consolidation among Africa’s largest economies and improving macroeconomic indicators lay the groundwork for further growth. Efforts in diversification, legal reforms, and investment attraction could help the country not only maintain but strengthen its position on both the regional and global stage.
According to the latest IMF World Economic Outlook report, Algeria’s GDP is projected to grow by 3.5% in 2025 — 0.5 percentage points higher than previous forecasts. In monetary terms, the forecast has been revised upward, with GDP expected to reach $268.89 billion, $8.89 billion more than last year’s estimate. Within Africa, Algeria is now firmly positioned as the third-largest economy, trailing only Nigeria and South Africa.
Diversification Success: From Hydrocarbons to Non-Oil Exports
For decades, Algeria’s economy remained heavily reliant on the oil and gas sector, which accounted for over 90% of export revenues. However, in recent years, the country has embarked on major economic diversification reforms. According to the World Bank, Algeria’s non-oil exports reached $5.1 billion in 2023 — three times the level in 2017.
Today, fertilizers, steel products, and cement have become key pillars of Algerian exports. This reflects early success in expanding the country’s economic base and reducing dependence on hydrocarbon prices.
Reforms and Investment Climate
The World Bank highlights Algeria’s “bold course” toward economic renewal. Key reforms include modernization of port infrastructure, a new investment law aimed at improving conditions for private and foreign capital, and measures to boost external trade efficiency.
These efforts are already bearing fruit: the second half of 2024 saw growth in foreign direct investment and increased non-oil export volumes. Such progress allows experts to view the country’s prospects with cautious optimism.
Algeria in the African and Arab Context
Algeria ranks among the top three African economies and stands out for its resilience compared to some neighbors. For example, Sudan is forecast to see a 0.4% contraction in 2025, while Iraq is expected to face a 1.5% GDP decline.
Outlook
Algeria’s consolidation among Africa’s largest economies and improving macroeconomic indicators lay the groundwork for further growth. Efforts in diversification, legal reforms, and investment attraction could help the country not only maintain but strengthen its position on both the regional and global stage.
