Algeria’s government has set a headline target of surpassing US$400 billion in gross domestic product (GDP) by the end of 2027, a goal that, analysts say, may largely reflect accounting changes rather than genuine improvements in economic activity or living standards.
President Abdelmadjid Tebboune and state media have repeatedly highlighted the milestone since 2024, claiming a jump from recent estimates of roughly US$240–270 billion to over US$400 billion in just three years. But economists caution that much of the projected growth is “artificial,” driven by statistical adjustments, rebasing of national accounts, and inclusion of informal-sector output, rather than real expansion of productive capacity.
State statistics authorities are updating the base year for national accounts, a standard procedure designed to better reflect current prices, sectoral weights, and economic structure. While rebasing can raise measured GDP, it does not directly improve household incomes, export diversity, or private-sector development.
The government also factors in informal economic activity, often estimated rather than rigorously measured. Integrating such output can increase nominal GDP figures, but experts note that this does not immediately translate into higher tax revenues, formal jobs, or sustainable economic growth.
Official GDP in US dollars is further inflated by using the government’s official exchange rate, which diverges significantly from parallel market valuations of the Algerian dinar. This practice mechanically increases dollar-denominated GDP without changing the underlying domestic purchasing power or productivity.
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International institutions have highlighted Algeria’s structural constraints. The International Monetary Fund (IMF) in its 2025 Article IV report warned that state dominance, regulatory rigidity, and weak private-sector finance continue to suppress formal economic activity. Similarly, the World Bank noted the economy remains heavily dependent on hydrocarbons, with limited diversification and low export complexity.
Algeria’s fiscal situation underscores these challenges. In 2024, the country recorded one of the region’s largest deficits at 13.9% of GDP, driven by declining oil revenues and rising public spending to maintain social stability. Analysts say such fiscal patterns are inconsistent with a narrative of robust, self-sustaining economic growth outside the hydrocarbon sector.
To reach US$400 billion in nominal GDP over three years, the economy would require compound annual growth of 15–20%, assuming stable oil prices and currency conditions. IMF projections for 2026, however, suggest real GDP growth of around 3%, with risks skewed to the downside, while World Bank updates indicate moderating expansion without structural reforms.
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Economists describe Algeria’s $400 billion target as a “paper exercise” or “wishful accounting.” They warn that headline GDP growth, if largely statistical, can mislead investors, policymakers, and international partners about the true state of economic health. Without significant diversification, private-sector development, and reforms to the financial and regulatory environment, nominal GDP gains may fail to translate into higher living standards, broader employment opportunities, or improved fiscal stability.
“The arithmetic may add up on paper, but Algeria’s economy remains heavily reliant on oil and gas revenues, with limited private-sector dynamism,” said a North Africa-based economist. “Headline GDP numbers can mask underlying vulnerabilities, such as fiscal deficits, regulatory bottlenecks, and weak export diversification.”
Observers say that for Algeria to achieve meaningful growth, the government would need to implement structural reforms that support private investment, diversify exports beyond hydrocarbons, and formalize informal economic activity in a way that enhances productivity and income generation.
Without such changes, analysts warn that even if the US$400 billion milestone is reached on paper, the country’s economic reality measured in household welfare, private-sector dynamism, and sustainable growth may remain largely unchanged.
