Algeria aims to cut its budget deficit by 35.5% to $40 billion in 2026, equivalent to 12.4% of its GDP, despite unveiling a record-high spending plan designed to stimulate economic growth and strengthen household incomes, according to the draft budget bill seen by Reuters.
The proposed 2026 budget, which is expected to be approved by parliament, sets total expenditures at more than $135 billion, an increase from $128 billion in 2025 and $112 billion in 2024.
Even with higher spending, the government anticipates a sharp reduction in the deficit from $62 billion in 2025, citing projected expansion in non-hydrocarbon sectors such as agriculture, industry, and construction.
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As one of OPEC’s key gas producers, Algeria is pushing to diversify its economy and lessen reliance on hydrocarbons. While the energy sector remains central, the government is channeling investments into other industries to promote long-term, sustainable growth.
The 2026 budget framework is based on an average oil price of $60 per barrel and anticipates economic growth of 4.1%, slightly below the 4.5% growth initially forecast for 2025. Public sector wages are set to account for roughly one-third of total spending, rising by 1.4% to reach $45 billion next year.
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Image Credit: The Times of Israel
