Algeria wants to cut its budget gap by 35% in 2026, even though it has higher spending plans

Algeria’s budget bill indicates that, while adopting a record-high spending plan intended to sustain household incomes and spur economic growth, the country intends to cut its budget deficit by 35.5% to $40 billion in 2026, or 12.4% of GDP.

Expected to be approved by parliament and viewed by Reuters, the 2026 budget package calls for spending more than $135 billion, up from $128 billion in 2025 and $112 billion in 2024.

Despite the higher expenditures, the government anticipates that the deficit would decrease from $62 billion in 2025 due to expected growth in non-hydrocarbon industries like construction, industry, and agriculture.

Algeria, an OPEC member and significant gas producer, is working to diversify its economy in order to lessen its reliance on hydrocarbons. In order to promote sustainable growth, the government of North Africa is investing in a number of different businesses, even though the energy sector continues to play a crucial role.

The budget projects economic growth of 4.1% in 2026, up from the earlier prediction of 4.5% in 2025, and is predicated on an average oil price of $60 per barrel.

According to the draft budget, public sector wages will increase by 1.4% to $45 billion in 2026, or almost one-third of overall spending.