The Algerian budget draft shows the government aims to reduce the budget deficit by 35.5 percent to $40 billion in 2026, equivalent to 12.4 percent of GDP, even as it adopts a record spending plan aimed at boosting economic growth and supporting household income.

The 2026 budget, which is expected to be approved by parliament and reviewed by Reuters, anticipates total spending exceeding $135 billion, up from $128 billion in 2025 and $112 billion in 2024.

Despite increased spending, the government expects the deficit to fall from $62 billion in 2025 due to expected growth in non-hydrocarbon sectors such as agriculture, industry, and construction.

Algeria, a major gas producer and OPEC member, seeks to diversify its economy to reduce reliance on hydrocarbons. While the energy sector remains pivotal in the North African country, the government is investing in other sectors to promote sustainable growth.

The budget is based on an average oil price of $60 per barrel and forecasts economic growth of 4.1 percent in 2026, compared to an initial 4.5 percent expected for 2025.

Under the budget draft, public sector wages will constitute about one-third of total spending in 2026, increasing by 1.4 percent to reach $45 billion.