ALGIERS – Saturday, 28 October 2023 (APS) – Higher investments, notably in large industrial projects, assisted Algeria’s economic activity in the first quarter of 2023, and is expected to keep supporting the growth between 2023 and 2025, the World Bank said in its latest report on the economic situation in Algeria.

“Algeria has the potential to diversify its economy, reduce its dependence on imports, and increase non-hydrocarbon exports while sustainably creating private sector jobs,” said Kamel Braham, the World Bank’s Resident Representative to Algeria, quoted in this report.

“The good performance of the hydrocarbon sector and positive investment dynamics are expected to be sustained,” said Cyril Desponts, the World Bank’s Senior Country Economist for Algeria, stressing that “Algeria has built short-term macroeconomic buffers by accumulating foreign exchange reserves and budget savings.”

In its report, which tackles the country’s main evolutions and economic prospects, the World Bank underlined that Algeria’s economy “reached in 2022 its pre-pandemic level, with a recovery extending to the first half of 2023. Algeria’s growth is expected to retrieve its pre-pandemic trajectory by 2024, notably supported by the hydrocarbon and agricultural sectors.”

As regards the non-hydrocarbon activity, the report said that the growth of the gross domestic product will be stronger in 2024 and 2025, thanks to the resumption of the agricultural and crude oil production following that of OPEC’s quotas, shedding light on the investment growth that has to remain strong and continue supporting the industrial activity, particularly in the private sector.

According to the World Bank’s forecasts, “the inflation is expected to progressively moderate in 2024 and 2025,” assuming “prudent monetary and fiscal policies and a recovery in rainfall, allowing for solid agricultural production.”

The trade balance will remain positive in 2023, 2024 and 2025, according to the source, while expecting also a continued accumulation of foreign exchange reserve during these three years.