Algeria experiences sharp slowdown in economic growth in 2024

Algeria's growth rate has fallen sharply compared to the 2023 outturn according to quarterly national data from the National Statistics Office (ONS). This is partly because the national economy has been affected by the decline of the extractive industries, the main driver of the Algerian economy.  

During the second quarter of 2023, economic growth increased to 5%, compared to 3.6% in the same period in 2024. Nevertheless, the country's GDP increased from 8,288.4 to 8,784.5 billion dinars between the second quarter of 2023 and 2024. This GDP increase had the effect of an overall price inflation of 2.3%, after a fall of 2.6% in 2023. 

‘Volume growth was mainly supported by several sectors, notably agriculture, manufacturing, trade, repair of automobiles and household goods, transport and communications. These sectors recorded growth rates of 6.5%, 4.3%, 6.0% and 4.8% respectively," says the ONS. 

Agriculture and fishing grew from 2.8% in the second quarter of 2023 to 6.4% in the first three months of 2024. Meanwhile, manufacturing industries went from a growth rate of 1.0% in the first quarter of 2023 to 4.3% in the same period this year. The sector's value added stood at 929.4 billion dinars in the second quarter of 2024, compared to 854.9 billion dinars last year in the same period. 

The electricity and gas sector follows the same dynamics, with growth of 8.2% in Q2 2024 compared to 1.7% in the same period of 2023. 

In contrast, the growth rate of the extractive industries decreases to 2.7%, moving away from the figure of Q2 2023, when it achieved 8.0%. The value added of the extractive industries was 1,131.4 billion dinars in the second quarter of 2024, compared to 1,148.6 billion dinars in the same period last year.   

Within the services sector there are distinctions. For example, the pace of growth in hotels and restaurants has fallen sharply, just 9.5% compared to 34.2% in Q2 2023. Trade and repairs also stagnated at 6.0% compared to 5.9% last year. 

However, in terms of volume of imports of goods and services, it rose to 13.3% in the second quarter of 2024, compared to 9.6% during the same period in 2023, according to the ONS. The organisation explains this increase based on the rise in imports of goods, as they recorded an increase of 14.6% in the second quarter of 2024, compared to 9.1% during the same period in 2023. 

Algeria has the third largest GDP on the African continent and expects to reach a historically high level in the coming years. The country is selling more and more abroad, in particular non-hydrocarbon products such as cement, fertilisers, ammonia, steel, feldspar, etc.  

The North African country will have to accelerate industrialisation and local production in order to change the situation on the domestic market and have a greater influence on exports. This is the only way to overcome dependence on hydrocarbons, subject to changes in the global economy.