The already fragile economic and financial conditions in Algeria are expected to worsen as oil, the country’s main export, drops below $60 per barrel.
Oil markets plunged following Trumps tariffs that triggered fears of a global slowdown and reduced demand for oil and gas, whose prices have also declined.
Oil and gas represent the bulk of Algeria’s exports and the country has elaborated the 2025 budget on the basis of a referential barrel price of $70.
Algeria has increased its budget spending in 2025 to a record $128 billion with an expected fiscal deficit of $62 billion, which is equivalent to 19.8% of GDP.
Oil prices are expected to further fall in the upcoming days following OPEC’s decision to ramp up supply by 411,000 next month, auguring ill for Algeria’s finances.
Lower oil and gas revenue risks undermining Algeria’s frail social peace which rests on subsidies and public spending.
The country is already imposing import restrictions that led to long queues on basic products, including milk, oil, and basic commodities.
