Algeria aims to reduce budget deficit by 35% in 2026, despite spending record

Algeria's budget bill shows that it plans to reduce the deficit to $40 billion or 12.4% GDP by 2026. This is despite adopting a record spending plan to support economic growth and boost household incomes.

The 2026 budget package is expected to be approved by the parliament and seen and will project total expenditures exceeding $135 billion. This is up from $128 in 2025 and $112 in 2024.

The government anticipates that despite the increased spending the deficit will shrink to $62 billion by 2025 due to the anticipated growth of non-hydrocarbons sectors like agriculture, industry, and construction.

Algeria, a member of OPEC and a major producer of gas, is pursuing diversification in order to reduce its dependence on hydrocarbons. The energy sector is still a major part of the economy in Algeria, but the government has invested in other industries as well to promote sustainable growth.

Budget is based upon an average oil price per barrel of $60 and predicts a 4.1% economic growth in 2026 compared to the initial 4.5% forecast in 2025.

According to the draft budget, wages in the public sector will make up around a third (33%) of all spending by 2026. They are expected to increase by 1,4%, reaching $45 billion.

(source: Reuters)