Algeria targets lower 2027 budget deficit amid revenue concerns

Algeria's 2027 Finance Bill (PLF) aims to reduce the budget deficit to approximately 16.2% of the nominal GDP, down from previous levels. The government has projected total revenues to reach 9,251.1 billion dinars, representing a significant 15.5% increase compared to the previous year.

However, analysts have raised concerns regarding the optimism of these revenue projections. Historically, such large jumps in tax receipts in Algeria have been driven by external shocks, such as energy price surges, significant currency devaluations, or massive increases in import-based VAT. Current indicators suggest these drivers may be absent, as the oil market stabilizes and the dinar remains steady to control inflation.

There is also notable discrepancy in deficit calculations. While the government's plan suggests a reduction, the International Monetary Fund (IMF) projects a deficit of 10.2% of GDP for 2027. Some economic analyses suggest the actual financing need could vary significantly depending on whether one accounts for unassigned credits and actual expenditure execution rates.