Algeria’s Ambitious Path for Development

Algeria has been pursuing an ambitious path for its development. With a focus on building resilience, adopting innovations, and economic modernization, the country has reached significant new milestone this year.

The most recent example of this was seen in the release of the World Bank’s annual income classification report on July 1st, 2024. Algeria was one of only four countries worldwide that moved across the threshold from a lower-middle income to upper-middle income classification.  The remarkable aspect of this shift for Algeria is that it was primarily due to a modernization of systems to overhaul statistical capacity, which allowed a more accurate measure of the country’s GDP. While the Algerian economy grew by 4.1% in 2023, the main driver of the upward reclassification was a comprehensive revision to national accounts statistics, which included expanding investment estimates and improving coverage of the informal economy.

“The GDP rebasing finalized in 2024 made it possible to better measure the Algerian economy, and thus to reclassify the country in the category that best reflects its level of economic development” said Kamel Braham, World Bank Resident Representative for Algeria. “This underscores the importance of availability and accuracy of data to inform economic policy.”

The strategic importance of improved data collection in facilitating Algeria’s diversified growth had been highlighted as a priority in recent Bank reports on Algeria. This improved and more transparent data will enhance understanding of the country’s economic dynamics, creating more opportunities for effective policymaking.

Another important achievement for Algeria was highlighted through the World Bank’s Global Gas Flaring Tracker report released in June. It shows that Algeria had the largest reduction in gas flaring worldwide in 2023. This marks the third consecutive year of reduction in its gas flaring emissions. In addition to a 2 percent decrease in oil production, the country achieved an overall 3 percent reduction in flaring intensity, setting a positive example in a year when global trends were not as favorable.  

The World Bank has had a longstanding strategic dialogue with Algeria on the sustainability of its energy sector. Technical assistance focuses on two key areas: supporting the development of a bankable wind energy program and assisting in the preparation of a strategy to promote renewable energy for various consumer types. These initiatives aim to diversify Algeria’s energy mix and promote sustainable development in the country’s energy sector.

The World Bank has supported Algeria in its quest for resilience, particularly in addressing the impacts of climate change. Algeria is exposed to a wide range of natural hazards, including floods, earthquakes, and forest fires, which threaten lives and livelihoods and cause substantial economic losses. The Bank has collaborated with Algeria’s Délégation Nationale aux Risques Majeurs (National Delegation for Major Risks), leading to a joint study on Diagnostic on Climate and Disaster Risk Management in Algeria. With forest fires particularly an ever-present threat, the Bank has worked with the Direction Générale des Forêts (General Directorate of Forestry) on knowledge, capacity, and consultative engagements, leading to a joint study on Sustainable Forest Management to Combat Forest Fires in Algeria. 

The World Bank’s biannual economic updates on Algeria are another set of analytical reports that are widely drawn upon by stakeholders to inform policy and public dialogue. With collaborations on improved data collection and the use of alternative data sources, the reports provide key insights on the country’s diversified growth.   

Looking ahead, priorities such as energy, climate resilience and strengthening the private sector provide opportunities for further engagements in the dynamic partnership between the World Bank and Algeria. 

Distributed by APO Group on behalf of The World Bank Group.