Algeria profile

Demography and Health

Algeria is home to about 46.8 million people in 2024, placing it among the larger populations in Africa and around the 33rd globally. The country’s birth rate stands at 19.6 births per 1,000 people (2023), suggesting a continuing but not explosive population growth, while the death rate is relatively low at 4.64 per 1,000, contributing to a steady natural increase. Life expectancy at birth is 76.3 years (2023), a level that aligns with middle-income countries and reflects ongoing improvements in health services and living conditions. The under-5 mortality rate is 22 per 1,000 live births (2023), indicating substantial progress yet still room for further reduction through improved maternal and child health programs, vaccination coverage, and nutrition. Algeria’s population is relatively young by global standards, which, combined with a birth rate in the mid-teens to high-teens, implies a potential demographic dividend if investments in health, education, and jobs keep pace with growth. The total prevalence of undernourishment is 2.5% of the population (2022), suggesting that chronic hunger is not a predominant constraint, though regional disparities may exist. Net migration is negative at -31,240 people in 2024, reflecting outflows that can affect labor markets and urban dynamics, even as remittances and urban opportunities cushion short-term impacts. Health expenditure as a share of GDP is 3.62% (2022), with per-capita health expenditure in purchasing power parity terms around 259 international dollars (2022), signaling a modest level of public health investment and room to expand access and quality of care as the population ages.

Economy

Algeria’s economy sits at a crossroads between large-scale public spending and structural reforms. GDP per capita in current US$ is 5,631 in 2024, and GDP per capita at PPP is 17,553 international dollars, signaling that while income levels are modest on a market exchange basis, purchasing power is stronger when considering local prices. Inflation eased to about 4.05% in 2024, suggesting a relatively stable price environment, albeit with sensitivity to global energy markets and fiscal policy. The export orientation of the economy is moderate, with exports of goods and services comprising 23.6% of GDP in 2023, while imports account for 20.1% of GDP, indicating a trade regime that is appreciably integrated with global markets but still driven by domestic resource allocation decisions. The current account balance stands at +2.57% of GDP in 2023, a positive cushion that reflects energy revenues and other exports contributing to macro stability, though this balance is vulnerable to commodity cycles. Foreign direct investment, net inflows as a share of GDP, are relatively modest at 0.491% in 2023, signaling persistent investment climate and structural frictions that can deter capital formation and diversification beyond hydrocarbons. The economy shows a heavy reliance on energy sectors, with low renewable integration (renewable energy consumption at only 0.1% of total final energy consumption in 2021) and a broad opportunity to diversify into manufacturing, services, and value-added sectors. Domestic policy indicators show regulatory quality at −0.948 and rule of law at −0.678, with governance and corruption controls also negative, suggesting that improving the business environment, property rights, and contract enforcement would be important for sustaining growth, attracting investment, and raising productivity. The government’s substantial expenditure on defense (current military expenditure around 18.26 billion USD in 2023, ranking 19th globally) reflects security and strategic priorities but may also crowd out investment in human capital and infrastructure if not managed within a broader growth strategy.

Trade and Investment

Algeria presents a trade profile characterized by notable openness but with a relatively modest share of output devoted to international trade. Exports of goods and services amount to 23.6% of GDP in 2023, while imports of goods and services account for 20.1% of GDP, indicating a trade structure that can both supplement and constrain domestic production. The positive current account balance of 2.57% of GDP in 2023 underscores energy revenues and export activity, lending macro stability and currency resilience, though the extent of diversification remains limited. Foreign direct investment, net inflows as a share of GDP, stand at about 0.491% in 2023, signaling that Algeria still faces challenges in attracting higher and more stable foreign capital, possibly due to regulatory quality and governance constraints reflected in the negative regulatory quality score (−0.948) and related indicators. The logistics environment shows a score of 2.1 on the Logistics Performance Index (1 = low, 5 = high) in 2022, with a rank of 25, suggesting that trade-related infrastructure and procedures are comparatively capable within a broader regional context, though there is always room for improvement in customs efficiency, reliability, and cost of transport. Internet penetration is relatively strong, with 76.9% of individuals using the internet (2023), which supports e-commerce, digital services, and data-driven trade models. On the innovation front, resident patent applications are 268 in 2021, ranking 51 in the world, indicating a developing but still nascent domestic innovation ecosystem. Overall, trade and investment dynamics reflect a country that is moderately open, with significant potential for diversification, enhanced governance, and targeted reforms to attract higher-quality investment and broaden export opportunities beyond hydrocarbons.

Governance and Institutions

Algeria’s governance indicators paint a picture of structural challenges that raise questions about predictability and the ease of doing business. Political stability and absence of violence/terrorism scores are negative (−0.578 in 2023), suggesting vulnerability to political shocks and security concerns that can affect policy continuity and investor confidence. Regulatory quality is notably weak (−0.948), and the rule of law sits at −0.678, reflecting concerns about the reliability of regulatory processes, contract enforcement, and the judicial environment. Control of corruption is −0.589, and government effectiveness is −0.67, together implying that public sector performance may be constrained by inefficiencies and governance gaps. These indicators help explain the modest level of foreign direct investment and caution in long-term capital commitments, as well as potential friction in implementing structural reforms. The combined governance landscape intersects with infrastructure and trade, influencing the effectiveness of policy reforms in energy diversification, private sector development, and social protection. In this context, policy efforts aimed at strengthening institutions—such as simplifying regulatory procedures, reinforcing property rights, increasing transparency, and improving public procurement—could help unlock higher investment, enable diversification, and improve social outcomes in health, education, and employment. The broader governance environment thus remains a critical determinant of Algeria’s longer-term trajectory, particularly as it seeks to transform from an energy-dominated economy toward more resilient, knowledge-driven growth.

Infrastructure and Technology

Algeria demonstrates meaningful digital penetration and notable logistics capacity, yet its overall infrastructure remains a work in progress. Individuals using the internet reach 76.9% of the population in 2023, signaling strong digital access and the potential for e-government, digital finance, and online education. The Logistics Performance Index score of 2.1 (2022) with a rank of 25 indicates that Algeria’s trade and transport-related infrastructure is comparatively solid relative to many peers, supporting import-export activities, supply chains, and regional connectivity, though it would benefit from continued investment in port efficiency, rail modernization, and last-mile logistics. On the innovation front, resident patent applications number 268 in 2021, ranking 51, suggesting that while there is a nascent R&D base, domestic innovation remains limited and can be a bottleneck for moving up the value chain unless complemented by stronger research ecosystems and incentives for private-sector innovation. The share of renewable energy consumption is extremely low, at 0.1% of total final energy consumption in 2021, underscoring a heavy reliance on fossil fuels and a broad opportunity to accelerate the deployment of solar, wind, and other renewables to improve energy security, reduce emissions, and create new sectors. The combination of high internet adoption, credible logistics capacity, and a developing innovation framework points to a country with latent digital and industrial potential that could be unlocked through targeted policy support, improved governance, investment in human capital, and a more conducive environment for private sector growth and technology transfer.

Environment and Sustainability

Algeria faces pronounced environmental and resource-management challenges, underscoring the need for resilient adaptation and sustainable development. The level of water stress is extremely high, with freshwater withdrawal at 138.0% of available resources in 2021, indicating that water resources are under severe pressure and that demand exceeds supply in many basins. This situation heightens the urgency of integrated water resource management, efficiency improvements in irrigation, and investments in water reuse and desalination. Total greenhouse gas emissions per capita amount to 5.56 t CO2e in 2023, placing Algeria in a mid-to-high per-capita emissions band, with significant room to decarbonize through energy diversification and cleaner industrial processes. The low share of renewable energy (0.1% of total final energy consumption in 2021) points to a heavy reliance on fossil fuels and an opportunity to accelerate the transition toward solar and wind, leveraging Algeria’s geographic advantages. The country reports a relatively low prevalence of undernourishment at 2.5% of the population in 2022, which aligns with improving food security, yet ongoing climate variability and water constraints could threaten this stability if agricultural productivity is not safeguarded. Additionally, life expectancy of 76.3 years and a modest current health expenditure share (3.62% of GDP in 2022) reflect a health system capable of delivering essential services but needing further investment to address aging, non-communicable diseases, and access disparities. Taken together, Algeria’s environmental and sustainability profile suggests a critical policy frontier: expanding renewable energy use, implementing water-smart agriculture, and building resilience to climate risks while pursuing inclusive growth that preserves ecological capital for future generations.