Algeria’s draft finance law for 2026 marks a significant increase in public expenditure, with total spending projected to exceed 17.6 trillion dinars. This plan comes amid continued global economic uncertainty, weak international trade, and the persistence of geopolitical tensions, all of which shape fiscal priorities for the year ahead.
The budget is structured around anticipated economic growth of 4.1% in 2026. Despite expectations of a 2% decline in hydrocarbon export volumes, the government’s forecasts rely on stable oil prices and a gradual increase in non-oil economic activity. Officials cite these projections to support their public finance strategy.
Public sector salaries account for more than a third of total government spending, with allocations reaching 5.9 trillion dinars—an increase of 83 billion dinars over 2025. Direct transfers and subsidies remain central, with 2.8 trillion dinars attributed to public institutions and 2.3 trillion dinars directed to social programs, such as unemployment benefits and pensions. Additional subsidies—totaling 657 billion dinars—will continue for basic commodities like cereals, milk, energy, and sugar.
Capital expenditure is set at 4.1 trillion dinars, with funding allocated to infrastructure and equipment projects across various sectors. This portion of the budget reflects an intent to support broader economic activity beyond the hydrocarbons sector.
The draft law forecasts a treasury deficit of 5.2 trillion dinars, approximately 12.4% of GDP for 2026. Fiscal measures proposed include temporary tax exemptions on select essential imports, support for business startups, and actions to simplify fiscal procedures. Additional provisions target fraud prevention, anti-corruption initiatives, and business environment improvements.
The proposed budget continues existing trends in public finance, aiming to address economic pressures while maintaining funding for social programs and public infrastructure. Major decisions in spending and taxation reflect both the constraints and priorities identified by Algerian authorities in light of domestic and international economic developments.
