Throughout 2023, the Algerian economy recorded positive results, despite ongoing geopolitical tensions and disruptions in the hydrocarbons market, according to the Bank of Algeria’s annual report. The report highlighted significant achievements in areas such as growth, exports, and state revenue improvements.
“Despite enduring geopolitical tensions and disturbances in the hydrocarbons market, the overall performance of the Algerian economy remained commendable in 2023, particularly regarding exports and state revenues. This positive economic outlook, driven by improved conditions in international trade, helped mitigate inflationary pressures towards the end of 2023,” emphasized the central bank in its report published on its official website.
In this context, the Bank of Algeria outlined several key performances for 2023. These included a significant slowing of inflation, notable GDP growth, surpluses in the balance of payments, increased foreign exchange reserves, appreciable growth in economic credits, and the resilience of the banking sector.
These indicators collectively attest to favorable outcomes for the national economy in 2023, as detailed in the report focusing on the evolution of main economic, monetary, and financial indicators, as well as actions taken by the Bank of Algeria within the financial sector.
Regarding economic activity, it recorded respectable growth rates in 2021, 2022, and 2023, with figures standing at 3.8%, 3.6%, and 4.1%, respectively, following a sharp recession in 2020 (-5%) during the global Covid-19 pandemic, the document recalls.
The real growth rate achieved in 2023 was the highest from 2015 to 2023, noted the financial institution, attributing this accelerated pace primarily to the extractive industries sector, which saw a growth of 4.8% in 2023 compared to a previous contraction of 5.1%.
Additionally, the construction sector’s contribution was highlighted, presenting a growth rate of 3.7% and comprising 12.9% of the GDP in 2023 versus 12% in 2022.
Over 10,500 billion DA in credits allocated to the Algerian economy
The 2023 fiscal year also witnessed a 5.8% growth in credits to the economy, an increase of 2.6 percentage points from the end of 2022 (3.2%), reaching 10,694.9 billion DA by December 2023 compared to 10,112.3 billion DA in 2022.
This favorable development in distributed credits impacted both public banks, which saw a rise of 5.3%, and private banks, which experienced an 8.7% increase compared to 3.4% and 2.4%, respectively, at the end of 2022.
Regarding the financial and banking situation, most indicators remain solid, observed the Bank of Algeria. In particular, it cited the overall balance of payments, which posted its second consecutive surplus in 2023 after eight years of continuous deficits (2014-2021), amounting to $6.347 billion. This surplus, combined with that of 2022, facilitated the rebuilding of official foreign exchange reserves (excluding monetary gold), which reached $68.988 billion by the end of 2023, up from $60.944 billion at the end of 2022.
“This level of foreign exchange reserves, significantly above the minimum international standards recommendations, demonstrates the robustness of Algeria’s external position,” stated the Bank of Algeria.
In 2023, the trade balance registered a surplus of $12.713 billion, down from $26.958 billion in 2022, primarily due to declining hydrocarbon prices on the international market. Consequently, goods exports amounted to $55.554 billion by the end of December 2023, a decrease from $65.716 billion at the end of December 2022, marking a drop of $10.161 billion (-15.5%).
Meanwhile, non-hydrocarbon goods exports reached $5.058 billion by the end of December 2023, compared to $5.978 billion during the same period the previous year. In contrast, goods imports increased by 10.5%, rising from $38.757 billion at the end of December 2022 to $42.842 billion by the end of December 2023.
This surge in imports was mainly driven by industrial equipment, non-food consumer goods, and other products. However, food imports, which accounted for 23.2% of total goods imports, decreased from $10.367 billion in 2022 to $9.921 billion in 2023, following a decline in cereal imports by approximately $1.176 billion.
Additionally, the Central Bank reported a drop in inflation, which fell from 9.29% at the end of 2022 to 7.84% at the end of 2023. The report noted that this “decelerating inflation trend had been noticeable since the beginning of the second half of 2023.”
