Algeria Approves Historic Budget for 2025
Algerian President Abdelmadjid Tebboune has officially approved the largest budget in the country's history, set to take effect on January 1, 2025. This significant financial plan was confirmed during a signing ceremony at El Mouradia Palace, attended by members of the new government staff. The budget, which was unanimously approved by the National People's Assembly and the Council of the Nation on November 16, outlines total expenditures exceeding 16,700 billion dinars (approximately $128 billion), marking a 10% increase from the previous year's budget of $112 billion.
The 2025 budget anticipates a substantial financial deficit of 8,271 billion dinars (around $62 billion), equivalent to 19.8% of Algeria's GDP. This deficit represents a significant increase from the 43 billion dinars projected for 2024. The budget's preparation is based on a reference price of $70 per barrel of oil for the next three years, reflecting Algeria's heavy reliance on oil and gas revenues, which account for about 90% of the country's foreign exchange income.
Economic Outlook and Implications
Despite the projected deficit, the Finance Ministry expects revenues to reach 8,523 billion dinars ($64 billion), a 4.5% increase compared to the current year's revenues. Additionally, the budget includes numerous tax and customs exemptions for imported goods, aimed at preserving citizens' purchasing power amidst economic challenges. Economic growth is projected to be 4.5% for both 2025 and 2026, but is expected to decline to 3.7% in 2027, attributed to a forecasted slowdown in the hydrocarbon sector. This budget reflects Algeria's ongoing struggle with economic diversification and its dependence on oil and gas exports.
