Ranked as the third most important economy in the MENA region and a leader in the Maghreb, Algeria is one of a handful of countries that have achieved 20% poverty reduction in the past two decades. The Algerian Government took significant steps to improve the wellbeing of its people by implementing social policies in line with the United Nations Sustainable Development Goals. Among other major achievements, the country’s oil boom has enabled the authorities to clear Algeria’s debt, invest in infrastructure projects and improve the country’s Human Development Indicators.
Algeria has made significant gains in each of the key Human Development Indicators (HDI). The country’s position is now 83rd out of 188 countries, which ranks it among the highly developed cohort in the latest Human Development Report.
The still largely positive results of shared prosperity have contributed to Algeria’s overall socioeconomic stability. However, the continued depressed worldwide oil prices have necessitated changes in country economic models and have triggered a domino effect of reforms in the MENA oil exporting countries to adapt to the new scenario.
On the economic front, Algeria’s economic growth decelerated in 2017 due to a slight decline in hydrocarbon production and continued modest non-hydrocarbon growth, showing a slight upturn from 2.3 % in 2016 to 2.5 % in 2017.
Despite the decline in the current account deficit, its overall level remained high, given the modest growth of the economy. Imports increased slightly, by 2.7 % in 2017 while exports decreased significantly, by 16.5%. Overall, the current account balance (-14.7 percent of GDP) is indicative of the lack of adjustment of imports to the large reduction in export revenues since 2014.
Aware of the numerous challenges that its economy faces, Algerian authorities have launched a development strategy to revitalize the process intended to diversify the national economy starting with the non-oil sector while deepening the reforms needed for the structural transformation of the economy to adapt to the macro-economic changes brought about by globalization.This policy aims to move toward sustainable growth, create jobs, by regulating industry activities, developing investments, upgrading local businesses.
With regard to its numerous significant potentialities and as part of broad economic diversification efforts, Algeria is working to attract more private sector investment – both domestic and foreign –, to reduce the country’s import bill and stepping up local production.