Algeria has announced plans to cut its budget deficit by 35.5 percent in 2026, even as the government pursues record spending aimed at sustaining growth and protecting household incomes. The draft budget projects a deficit of around $40 billion, or 12.4 percent of GDP, compared with $62 billion in 2025. The move reflects Algeria’s effort to strike a balance between fiscal prudence and expansive economic stimulus, Reuters reported.
Under the proposed 2026 budget, total government expenditure is set to exceed $135 billion, rising from $128 billion in 2025 and $112 billion in 2024. The increase is driven largely by higher allocations to public sector wages, infrastructure, and subsidies. Spending on salaries alone is expected to reach $45 billion, accounting for nearly one-third of total outlays. The government said the plan is designed to strengthen domestic demand and sustain public sector stability while supporting diversification efforts.
Officials project that economic growth will reach 4.1 percent in 2026, slightly down from the 4.5 percent expected in 2025. The budget assumes an average oil price of $60 per barrel and anticipates stronger performance from non-hydrocarbon sectors such as agriculture, industry, and construction. Authorities hope this diversification will help boost revenues and ease the country’s dependence on oil and gas exports, as highlighted by Bloomberg.
Analysts have described the plan as ambitious but necessary, emphasizing that its success will depend on disciplined implementation and stable global energy prices. A decline in oil prices or delays in structural reforms could complicate Algeria’s efforts to meet its fiscal targets. Nonetheless, the government insists that the measures reflect its commitment to sustainable growth and macroeconomic stability.
