Against the backdrop of downward revisions to global forecasts by the International Monetary Fund (IMF), driven by trade wars and rising protectionism, Algeria is demonstrating exceptional resilience. The country is among four Arab economies that, according to the IMF, are expected to maintain positive dynamics despite the deterioration of global conditions.

According to the latest IMF report World Economic Outlook, Algeria’s GDP is expected to grow by 3.5% in 2025, which is 0.5 percentage points higher than previous forecasts. In monetary terms, the forecast has been revised upward: GDP is expected to reach $268.89 billion, which is $8.89 billion higher than last year’s estimate. On the African continent, Algeria consolidates its position as the third-largest economy, behind only Nigeria and South Africa.

Diversification Success: From Hydrocarbons to Non-Oil Exports

For a long time, the Algerian economy remained highly dependent on the oil and gas sector, which accounted for more than 90% of export revenues. However, in recent years the country has launched large-scale reforms aimed at economic diversification. According to the World Bank, Algeria’s non-oil exports reached $5.1 billion in 2023 — three times the level of 2017.

Today, key components of Algerian exports include fertilizers, steel products and cement. This reflects early success in expanding the country’s economic base and reducing dependency on hydrocarbon prices.

Reforms and Investment Climate

The World Bank notes that Algeria is pursuing an “ambitious course” toward economic modernization. Key reforms include:

• modernization of port infrastructure,

• a new investment law aimed at attracting private and foreign capital,

• measures to improve the efficiency of foreign trade.

These efforts are already yielding results: in the second half of 2024, Algeria recorded growth in foreign direct investment and an increase in non-oil exports. This progress allows experts to assess the country’s prospects with cautious optimism.

Algeria in the African and Arab Context

Algeria is among the top three largest economies in Africa and shows resilience compared to its neighbors. For example:

• Sudan is expected to contract by 0.4% in 2025,

• Iraq’s GDP is expected to decline by 1.5%.

Outlook

The strengthening of Algeria’s economic position in Africa and the improvement of macroeconomic indicators create a solid basis for further growth. Diversification, reforms and investments will allow the country not only to maintain but also to reinforce its standing in regional and global markets.

RABC Information Service