© 2024 International Monetary Fund IMF Country Report No. 24/88 ALGERIA 2023 ARTICLE IV CONSULTATION—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR ALGERIA Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2023 Article IV consultation with Algeria, the following documents have been released and are included in this package: • A Press Release summarizing the views of the Executive Board as expressed during its March 27, 2024 consideration of the staff report that concluded the Article IV consultation with Algeria. • The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on March 27, 2024 following discussions that ended on December 14, 2023, with the officials of Algeria on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on March 8, 2024. • An Informational Annex prepared by the IMF staff. • A Statement by the Executive Director for Algeria. The document listed below has been or will be released. Selected Issues The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents. Copies of this report are available to the public from International Monetary Fund • Publication Services PO Box 92780 • Washington, D.C. 20090 Telephone: (202) 623-7430 • Fax: (202) 623-7201 E-mail: publications@imf.org Web: http://www.imf.org International Monetary Fund Washington, D.C. April 2024 PR24/100 IMF Executive Board Concludes 2023 Article IV Consultation with Algeria FOR IMMEDIATE RELEASE Washington, DC – March 29, 2024: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Algeria on March 27, 2024. The Algerian economy was still emerging from the Covid pandemic when spillovers from Russia’s war in Ukraine and recurrent droughts pushed up inflation, while high international hydrocarbon prices boosted government revenue and exports. The Algerian economy is estimated to have grown by 4.2 percent in 2023, a robust performance owing to a rebound in hydrocarbon production and strong performance in the industry, construction, and service sectors. The external position remained solid with a current account surplus for the second year in a row. However, inflation pressures persisted (primarily due to high food prices) and monetary policy remained accommodative. The fiscal deficit is estimated to have widened, albeit less than foreseen in the 2023 revised budget because of relatively slow execution rates. The near-term outlook is broadly positive, but inflation remains a concern. Real growth is forecast to remain strong in 2024, at 3.8 percent, supported in part by large fiscal spending. Inflation would start to decelerate, particularly thanks to easing fresh food prices, although entrenchment at a relatively elevated level is a concern. The current account surplus is projected to narrow further in 2024 as hydrocarbon prices decline. Medium-term economic prospects hinge on efforts to diversify the economy and the ability to attract private investment, and are subject to several risks. R isks on the downside include stubborn inflation, volatility in international hydrocarbon prices, fiscal risks from contingent liabilities, large budgetary financial needs, and rising public debt. Extreme climate events would affect the economy and the budget while a disorderly energy transition is a longer-term risk. On the upside, sustained, bold, and deep structural reforms and resolute efforts to diversify the economy, improve the business climate, attract investment, and tap new export markets could spur growth and job creation further. Executive Board Assessment2 In concluding the Article IV consultation with Algeria, Executive Directors endorsed staff’s appraisal as follows: Executive Directors agreed with the thrust of the staff appraisal. They welcomed Algeria’s sustained solid growth and external position, despite multiple economic headwinds. While the near-term outlook is 1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. 2 At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm. 2 broadly