Economy of Algeria

Mother Earth Travel > Country Index > Algeria > Map Economy History

The hydrocarbons sector is the backbone of the Algerian economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the fifth-largest reserves of natural gas in the world and is the second-largest gas exporter; it ranks 14th for oil reserves. Its key oil and gas customers are Italy, Spain, France, and the United States. U.S. companies have played a major role in developing Algeria's oil and gas sector; of the $4 billion in U.S. investment in Algeria, the vast bulk is in the petroleum sector.

Faced with declining oil revenues and high-debt interest payments at the beginning of the decade, Algeria implemented a stringent macroeconomic stabilization program and rescheduled its Paris Club debt in the mid-1990s. The macroeconomic program has been particularly successful, reducing inflation to approximately 1% and narrowing the budget deficit. Algeria's economy has grown at about 4% annually since 1999. The country's foreign debt has fallen from a high of $28 billion in 1999 to its current level of $24 billion. The spike in oil prices in 1999-2000 and the government's tight fiscal policy, as well as a large increase in the trade surplus and the near tripling of foreign exchange reserves has helped the country's finances. However, an ongoing drought, the after effects of the November 10, 2001 floods and an uncertain oil market make prospects for 2002-03 more problematic. The government pledges to continue its efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector. However, it has thus far had little success in reducing high unemployment, officially estimated at 30% and improving living standards.

President Bouteflika has announced sweeping economic reforms, which, if implemented, will significantly restructure the economy. Priority areas are banking reform, improving the investment environment, and reducing government bureaucracy. The government has announced plans to sell off state enterprises: sales of a national cement factory and steel plant have been completed and other industries are up for offer. In 2001, Algeria signed an Association Agreement with the European Union; it has started accession negotiations for entry into the World Trade Organization.

GDP: purchasing power parity - $212.3 billion (2004 est.)
GDP - real growth rate: 5% (2000 est.)
GDP - per capita: purchasing power parity - $5,500 (2000 est.)
GDP - composition by sector:
agriculture:  11%
industry:  37%
services:  52% (1999 est.)
Population below poverty line: 23% (1999 est.)
Household income or consumption by percentage share:
lowest 10%: 2.8%
highest 10%: 26.8% (1995)
Inflation rate (consumer prices): 2% (2000 est.)
Labor force: 9.1 million (2000 est.)
Labor force - by occupation: government 29%, agriculture 25%, construction and public works 15%, industry 11%, other 20% (1996 est.)
Unemployment rate: 30% (1999 est.)
Budget:
revenues:  $15.8 billion
expenditures:  $16 billion, including capital expenditures of $5.3 billion (2001 est.)
Industries: petroleum, natural gas, light industries, mining, electrical, petrochemical, food processing
Industrial production growth rate: 7% (1999 est.)
Electricity - production: 23.215 billion kWh (1999)
Electricity - production by source:
fossil fuel:  99.14%
hydro:  0.86%
nuclear:  0%
other:  0% (1999)
Electricity - consumption: 21.613 billion kWh (1999)
Electricity - exports: 307 million kWh (1999)
Electricity - imports: 330 million kWh (1999)
Agriculture - products: wheat, barley, oats, grapes, olives, citrus, fruits; sheep, cattle
Exports: $19.6 billion (f.o.b., 2000 est.)
Exports - commodities: petroleum, natural gas, and petroleum products 97%
Exports - partners: Italy 22%, US 15%, France 12%, Spain 11%, Brazil 8%, Netherlands 5% (1999)
Imports: $9.2 billion (f.o.b., 2000 est.)
Imports - commodities: capital goods, food and beverages, consumer goods
Imports - partners: France 30%, Italy 9%, Germany 7%, Spain 6%, US 5%, Turkey 5% (1999)
Debt - external: $25 billion (2000 est.)
Economic aid - recipient: $100 million (1999 est.)
Currency: 1 Algerian dinar (DA) = 100 centimes

SOURCES: The World Factbook, U.S. Department of State

Mother Earth Travel > Country Index > Algeria > Map Economy History