L’économie hors hydrocarbures progresse à un rythme soutenu en Algérie
Analysis of Algeria’s Economic Growth in 2024
In 2024, the Algerian economy demonstrated robust expansion, particularly in non-hydrocarbon sectors, according to Cyril Desponts, the lead economist for Algeria at the World Bank. During a press conference in Algiers, he highlighted that the Gross Domestic Product (GDP) outside hydrocarbons grew by an impressive 4.8%. This highlights a significant shift in economic momentum, positioned ahead of the World Bank’s periodic economic report focusing on Algeria.
Desponts noted that the strong economic performance was driven by vigorous private consumption and active investment, coupled with a marked decrease in inflation rates—from 9.3% in 2023 to 4% in 2024. This decline in inflation was attributed to the strong performance of the agricultural sector, which helped stabilize food prices despite lower rainfall.
Looking ahead, the World Bank anticipates a rebound in hydrocarbon production and exports in 2025, primarily due to increased oil production quotas within the OPEC+ framework. The report titled "Accelerating Productivity Gains for Diversified and Resilient Growth" emphasizes the importance of enhancing productivity and gradually shifting employment to more productive sectors like agriculture and construction.
Desponts stressed that productivity improvements, particularly within manufacturing and services, are critical for unlocking Algeria’s growth potential. He asserted that transitioning to higher value-added sectors, supported by gradual budgetary adjustments, targeted reforms to stimulate private investment, and a strategic approach to skills development, will be crucial in building a more resilient economy.
Amel Henider, another World Bank economist, echoed this sentiment by noting that investment remained strong in 2024. This robustness in investment not only bolstered domestic demand but also uplifted manufacturing and service sectors. Henider mentioned a notable increase in production, nearing 5%, fueled by various sectors—most notably, a successful cereal farming season.
Kamel Braham, the World Bank’s resident representative in Algeria, highlighted the country’s consistent growth trajectory but cautioned that Algeria’s fiscal and external balances are highly sensitive to fluctuations in oil and gas prices. He reiterated the necessity for accelerated structural transformation to enhance resilience and support sustainable growth.
Braham commended the wealth of technical cooperation programs between the World Bank and Algeria, indicating a solid partnership. Projects in collaboration with the Algerian Investment Promotion Agency (AAPI) and various initiatives aimed at developing non-hydrocarbon exports and women entrepreneurship align with the Algerian government’s strategic goals.
Summary
In essence, Algeria’s economic landscape in 2024 showcased notable growth dynamics outside of its traditional hydrocarbon base. The World Bank’s projections reflect a friendly investment climate, driven by strong domestic demand and an exceptionally performing agricultural sector that also mitigated inflationary pressures. The focus moving forward will be on enhancing productivity and diversifying the economy, which necessitates strategic reforms and investment in skill development. Both local and international economic stakeholders recognize the importance of adapting to global economic shifts, especially regarding oil price vulnerabilities and the necessary structural transformations to ensure sustained growth and resilience in the Algerian economy.
