Algeria’s 2026 budget allocates record military spending despite economic strains

Algeria’s Council of Ministers has approved the draft Finance Bill for 2026, allocating $25 billion to the army at the expense of economy diversification, infrastructure, and social services.

The country has prepared a budget bill worth a record $135 billion, up from $128 billion in 2025 and $113 billion in 2024. Military spending represents 20.6% of the total budget.

This makes the army the largest receiver of public funds, surpassing even the ministry of finance, which accounts for 20.3% of the budget.

The surge in defense spending continues a trend that began in 2022, when Algeria doubled its military budget despite economic pressures from the COVID-19 pandemic and falling oil revenues.

Defense allocations jumped from an average of $8–11 billion between 2020 and 2022 to over $18 billion in 2023, followed by $22 billion in 2024 and $24 billion in 2025.

The 2026 budget increase comes amid declining hydrocarbon prices, currently hovering between $65 and $67 per barrel, and a projected $40 billion budget deficit, raising questions about fiscal sustainability.

Algeria’s defense budget now far exceeds spending on education (10.7% of the budget), despite the absence of major new security threats. Longstanding regional tensions, particularly with Morocco and in the Sahel, have either stabilized or diminished in recent years.