Algeria’s public finances are under mounting pressure after a dramatic drop in budget revenues in 2024,driven by falling hydrocarbon income and sluggish non-oil tax collection,according to the Bank of Algeria’s.
Total budget revenues fell by 22.66% year-on-year,with hydrocarbon revenues plunging by 31.13% and non-hydrocarbon revenues declining by 13.50%,the Bank said in its annual report.
The fiscal shock has pushed the country’s budget deficit to 4,930.28 billion dinars ($38 bln) in 2024,nearly quadrupling from 1,406.87 billion dinars in 2023.
As a share of GDP,the budget deficit surged from 4.18% in 2023 to 13.78% in 2024 while the global deficit rose from 5.52% to 13.91%,marking one of the steepest deteriorations in Algeria’s fiscal history.
The report attributes the revenue collapse to a combination of OPEC+ production cuts,lower global oil prices,and weak performance in non-oil sectors,which failed to offset the downturn.
Meanwhile,total public spending increased by 8.98%,driven by rising social transfers and capital expenditures ahead of the 2024 presidential elections.
Algeria’s exports of goods fell by 11.68%,while imports rose by 5.82%,eroding the trade surplus and leading to a near-equilibrium in the balance of payments. This took place at the expense of a severe import cut policy that left Algerians queuing for basic goods including milk.
The IMF,in its recent Article IV consultation,echoed these concerns,urging Algeria to reduce its dependence on hydrocarbons and accelerate private sector-led growth.
United News - unews.co.za