Algeria's Historic $128 Billion Budget for 2025
The Algerian government has recently approved a landmark financial budget of $128 billion for the year 2025, marking the largest allocation in the country’s history. This ambitious budget aims to enhance living conditions and stimulate investment across various sectors. The Finance Bill outlines public expenditures of approximately 16.8 trillion dinars ($126 billion), reflecting a 9.9% increase from the 2024 budget. A significant portion of this budget, around 5.34 trillion dinars ($40 billion), is earmarked for wage increases and new job creation, representing 34% of the total budget.
The government anticipates a budget deficit of 8.3 trillion dinars ($62 billion), closely aligned with projected revenues of 8.5 trillion dinars ($64 billion). Economic growth is expected to reach 4.5%, with GDP estimated at $278.71 billion and goods exports projected at $50.90 billion. Additionally, foreign exchange reserves are expected to rise to $72.95 billion.
Key Highlights and Economic Implications
Finance Minister Laaziz Fayed has announced plans to create nearly 100,000 jobs by 2025 and implement measures to support purchasing power, including interest rate reductions on loans for housing and infrastructure projects. The budget also includes exemptions from value-added tax on essential food imports, aimed at stabilizing prices for vulnerable populations.
Experts have highlighted that the budget aligns with President Abdelmadjid Tebboune’s electoral commitments and reflects a strategic focus on direct investment, which accounts for 19% of public expenditures. The government is prioritizing major agricultural projects and infrastructure improvements, particularly in rural areas, to bolster economic resilience.
However, financial analysts caution about potential imbalances created by increased transfer expenses aimed at preserving purchasing power. They advocate for reforms in the subsidy system to address inefficiencies and promote sustainability. Furthermore, the proposed financing strategies suggest a shift towards innovative financial instruments, including sovereign and corporate bonds, to support real investments and reduce reliance on debt financing.
Overall, Algeria's 2025 budget not only seeks to enhance economic growth and stability but also reflects a broader vision for sustainable development and social welfare. The successful implementation of this budget could significantly impact the country’s economic landscape and improve the living standards of its citizens.
