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flag Algeria Algeria: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

In 2013, Algeria's growth rate was 2.6%. This growth, somehow disappointing, was driven by the local demand and the increase in public investments. The growth rate, without the hydrocarbon sector would have been 5%, this higher result was due to the decrease in performance of the petro-gas sector. The growth rate could reach 3.2% in 2014. In 2013, the hydrocarbon sector underwent through a terrorist attack on the gas site of In Amenas; there were 40 dead victims and the personnel of foreign companies was evacuated. This site should restart its operations at the beginning of 2014. In October 2013, a large oil field was discovered. Lastly, the country's inflation, which had been very high in 2012, was controlled in 2013 (5%).

The impact of the Arab spring was very limited in Algeria. The five-year plan of 2010-2014, focuses on the modernization of its infrastructures and the privatization of its economy. Priority has been given to supporting investment and to promoting the national economy. The dependence of the Algerian economy on hydrocarbons is a potential barrier to the country's sustainable development. The laws on hydrocarbons have been modified in order to make this sector more attractive and to be able to exploit shale gas. In 2013, the financial situation of the country remained in a comfortable condition: USD 206 billion in foreign reserve assets and an external debt of USD 3.4 billion. Following the same trend of 2012, public expense highly increased in 2013. According to the IMF, the public subvention policies are not sustainable and they tend to be more profitable for the rich, increasing inequalities among the population. The subventions are USD 4 billion for basic foodstuffs (wheat, milk powder). The subventions for fuel are disastrous and they feed a traffic towards Tunisia and Morocco. The IMF considers that Algeria is unwillingly financing the consumption of these countries. The management control of public expenses has become an urgent objective considering the decline of hydrocarbon reserves. The IMF also has asked to establish structural reforms in order to improve productivity and the country's business climate, to diversify its exports and to reduce its domestic consumption. According to the estimations, the debt ratio could exceed 100% in 2050. In 2013, the state announced its will to decrease significantly its budgetary deficit; however in 2014, public spending will continue to increase. The budgetary deficit could reach USD 45 billion and it will be financed by funds from the oil income (the usage of these funds without transparency has been criticized). The current surplus remains positive but it should decrease due to the reduction of hydrocarbon exports and the dynamic increase of imports.

The current unemployment rate in Algeria is officially 9.7% but some claim that in reality, it is closer to 20%. It is more prominent among young people (21.5%) and women (17%). The GDP per capita was USD 4,770 in 2012. It should be noted that there is a large disparity between the urban and rural living conditions. Lastly, if the outgoing president Bouteflika runs again for the presidential elections in April 2014, the political situation in Algeria could become tense.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 199.39207.80212.45227.80e238.46
GDP (Constant Prices, Annual % Change) 2.83.32.83.8e4.0
GDP per Capita (USD) 5,4315,5425e5,8866,041
General Government Gross Debt (in % of GDP) 9.910.09.3e9.9e8.1
Inflation Rate (%) 4.58.93.3e3.2e4.0
Unemployment Rate (% of the Labor Force) 10.011.09.810.811.3
Current Account (billions USD) 19.8012.290.76-6.81-6.99
Current Account (in % of GDP) 9.95.90.4-3.0-2.9

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture contributes to about 10% of the GDP and employs one-fifth of the active population. The main crops are wheat, barley, oats, citrus fruits, wine grapes, olives, tobacco and dates. Algeria produces a large quantity of cork and has a significant amount of livestock farming.

The industry contributes to more than 60% of the GDP and employs one-fourth of the population. The oil and gas sector accounts for the majority of its budgetary income and almost all of its exports income. Algeria is the 2nd largest gas exporter in the world. It ranks 11th for its oil reserves and 7th for its confirmed gas reserves. The ores mined in big quantities are iron, lead, phosphate, uranium, zinc, salt and coal. The main activities of the manufacturing sector are industrial food processing, textile, chemical products, metals and construction materials. Traditionally, Algeria imports pharmaceutical products for its own needs; however, during the past few years, these imports have been decreasing while the local production is highly increasing.

The tertiary sector contributes to about one-third of the GDP and employs more than one-half of the workforce.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 10.8 30.9 58.4
Value Added (in % of GDP) 10.5 47.6 41.9
Value Added (Annual % Change) 10.3 2.3 -0.2

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Algerian Dinar (DZD) - Average Annual Exchange Rate For 1 USD 72.6574.3972.9477.5479.37

Source: World Bank - Last Available Data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
50.8/100
Position:
Mostly Unfree
World Rank:
146/178
Regional Rank:
14/15

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
4.81
World Rank:
75/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Algeria has an open economy, foreign trade representing almost three-fourths of the GDP.

Although, the Algerian trade balance is structurally positive, the country experienced a strong decrease of its surplus in 2013. In one year, its surplus went down from USD 21.5 billion to USD 11 billion. This was due to a sharp drop in exports and a simultaneous increase in imports. Hydrocarbon exports continue to represent almost the whole total of exports; however, in 2013, these were reduced due to a decline in reserves and an increase in domestic demand. The increase of exports was due to the higher cost of the imported products.

The main trade partners of Algeria are the European Union, the NAFTA countries (Free Trade Agreement between United States, Canada, and Mexico) and China. Algeria mainly imports equipment, food products and consumer goods; it exports almost exclusively oil, gas and their by-products.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 39,29440,47347,24750,37854,852
Exports of Goods (million USD) 45,19457,05373,48971,86665,917
Imports of Services (million USD) 11,20311,54911,94210,62110,453
Exports of Services (million USD) 2,7943,5193,6573,8113,672
Imports of Goods and Services (Annual % Change) 16.7----
Exports of Goods and Services (Annual % Change) -3.0----
Imports of Goods and Services (in % of GDP) 36.031.428.729.130.3
Exports of Goods and Services (in % of GDP) 35.438.439.037.733.1
Trade Balance (million USD) 7,79018,30125,97920,0499,452
Trade Balance (Including Service) (million USD) -90710,03117,10713,0022,606
Foreign Trade (in % of GDP) 71.369.967.766.963.4

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Spain 15.7%
Italy 13.7%
United Kingdom 10.9%
France 10.3%
United States 8.1%
See More Countries 41.4%
Main Suppliers
(% of Imports)
2013
China 12.4%
France 11.4%
Italy 10.3%
Spain 9.3%
Germany 5.2%
See More Countries 51.4%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 46.0%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 38.9%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 11.8%
Oils and other products of the distillation of...Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the non-aromatic constituents 1.6%
Ammonia, anhydrous or in aqueous solutionAmmonia, anhydrous or in aqueous solution 0.5%
See More Products 1.2%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 6.9%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 6.8%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 4.1%
Wheat and meslinWheat and meslin 3.9%
Bars and rods, of iron or non-alloy steel, not...Bars and rods, of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but incl. those twisted after rolling (excl. in irregularly wound coils) 3.4%
See More Products 75.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 

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Sources of General Economic Information

Ministries
The Ministry of Foreign Affairs
The Ministry of Finance (in French)
The Ministry of Industry and Restructuration
The Ministry of Industrial Development, SME and the Promotion of Investment
The Ministry of Commerce
Statistical Office
The National Office of Statistics
Central Bank
The Bank of Algeria
Stock Exchange
The Organization and Monitoring Committee for Stock Exchange Transactions (COSOB)
Search Engines
Algeria Network
Marweb Algérie
Economic Portals
The Algerian portal for political, economic, IT, sports and cultural news in Algeria and worldwide.
Ladoc, portal for Algeria, economic section
Made in Algeria, business portal

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Political Outline

Executive Power
The President of the Republic is the Head of State. He is elected by direct universal suffrage for 5 years. He appoints the Prime Minister and his government at the suggestion of the Prime Minister. The Prime Minister sets the amount of the State's expenses and revenue, and prepares some Bills.
Legislative Power
Parliament is composed of the Council of the Nation and the National Popular Assembly. Senators are elected by indirect universal suffrage for 6 years (renewable every 3 years). Deputies (MPs) are elected by direct universal suffrage. They examine successively Bills and private Bills, vote laws and monitor the government.
Main Political Parties
The main political parties in the country are: the PFLN (in Arabic) (National Liberation Front) which was previously the only legal party in the country, the RND (National Democratic Group), the FFS (Socialist Forces Front), the RCD (Culture and Democracy Group), the MRN (National Reform Movement) which is an Islamic party and the PT (in French)(Workers' Party). A law prohibiting political parties based on religion was promulgated in March 1997.
Current Political Leaders
President : Abdelaziz Bouteflika (since April 1999, re-elected in April 2004 and April 2009) – FLN
Prime Minister: Abdelmalek SELLAL (since 28 April 2014) - FLN
Next Election Dates
National Popular Assembly: 2017
Presidential elections : April 2019
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
121/180
Evolution:
4 places up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
6/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: November 2014