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Deterioration of the trade balance of Algeria during the first quarter of 2025: a disturbing situation
ONS report for August 2025
The report of the National Office of Statistics (ONS) of August 2025, relating to the government, shows an increasing imbalance of the trade balance, a reflection of an economy strongly dependent on the price of hydrocarbons, and challenges the government in more than one way to remedy this worrying situation.
During the first quarter of 2025, Algeria experienced an increase in imports for $ 13.74 billion, notably concerning drinks and tobacco, more than 54.1%in value, mineral fuels (+47.4%), oils and fats (+18%), various manufactured items (+15.9%), food (+1.9%) Transport machines and materials that fell highly by 19.8%. If this trend continues, we will have a value of imports, at the end of 2025, of $ 54.96 billion. But the most significant document is not the trade balance but the balance of payments which includes services and capital movements (for this the Algerian external debt is very low less than 3% of GDP) and imports of services, more than $ 6 billion between 2023/2024. If we apply the same rate of increase in imports of goods, 19%, this would give more than $ 7 billion. Thus, the value of imports of goods and services would, at the end of 2025, would total $ 61 billion, bringing us the period of the years 2018/2019. Although for serious comparisons, it would be necessary to apply in terms of purchasing power parity, the same dinar/dollar rate which exceeded 135 dinars a dollar. As for exports, still for the first half of 2025, they had a decrease of 5.08%, recalling that exports excluding hydrocarbons experienced a clear drop from $ 6.9 billion, 5.01 in 2023, around 4.60 billion dollars in 2024 and within these amounts more than 65% are hydrocarbon drifts. Thus, for the first quarter of 2025, there is a drop in exports of food products by 16.8%, drinks and tobacco also had 2.3%, however with increases for transport machines and equipment (+24.6%) and chemicals (+4.9%). This trend should increase for the end of 2025 because the economic structure has not fundamentally changed. Total exports during the first quarter of 2025 fell 5.8 %: so we are witnessing a decline in hydrocarbon exports, 2.9 % in volume and from 2.5 % in value from $ 12.68 billion during the first quarter of 2024 dinars to 11.7,000 billion dollars for the same period for 2025. Both American customs taxes over 30% on steel products and the prohibition of dumping which constitute a large fraction of exports outside hydrocarbons, excluding derivatives. As it will be necessary to be attentive to the impacts of the decision of the arbitration between Algeria and the European Union at the end of September 2025. And especially to the impacts of the USA/European Union agreements to buy oil and gas for an annual amount of 250 billion dollars representing more than 50% of the energy needs of Europe on exports in the direction of Europe which will influence the revenue of Sonatrach will be confronted with the high internal consumption (approximately 50% of its production) which increased from $ 60 billion in 2022, to 50 in 2023, between 44/45 billion dollars in 2025 and what will be for 2025? Because the GDP of $ 268 billion is irrigated by public expenditure via the Sonatrach rent for more than 80%. As a result between growing imports and decreased exports, during August 10, 2025 of 129.76 dinars one dollar ($ 1.17 one euro), and 151.48 dinars one euro, adding imports in euros and decreasing those in dollars, but digging the budget deficit since the main hydrocarbon exports source of currency of Algeria 98% by including derivatives, are converted into devalued dinars compared to the dollar, and decreasing the budget deficit in relation to imports in euros converted into dinars, during the first quarter of 2025, the trade balance of Algeria recorded a deficit of 2.07 billion dollars billion dinars, against an excess of 881 million dinars the same period 2024, which would give if we follow the same trend 8.28 billion dollars at the end of 2025. This would give about 15.5 billion dollars with the deficit of the spice of pepper at the end of 2025. Also, faced with this deterioration of both the trade balance and the balance of payments, this situation is worrying and influencing on the level of exchange reserves. Apart from the contradictory data of certain international agencies citing a source from the Bank of Algeria, announcing for the end of June 2025, 39 billion dollars of exchange reserves, by holding the official data of the IMF during its mission in Algiers in July 2025 which had given a provisional amount of $ 67 billion at the end And at the same pace at the end of 2025, exchange reserves would end at less than $ 50 billion at the end of 2025. However, I would like to attract the attention of public authorities to the Algerian economic fabric, in this year 2025, that 85%, raw materials and equipment, both public, private and administrations are imported, the integration rate not exceeding 15% and that The blind restriction of imports without targeting paralyzing the entire economic apparatus and that foreign trade, inseparable from domestic trade, must be a strategic planning.
In conclusion: it is clear the high dependence of the Algerian economy, the industrial fabric representing less than 5% of GDP, in the face of the vagaries of hydrocarbon prices whose volatile prices escape the internal decision. Exports are not decreed by administrative means but fall under public and private competitive enterprises in terms of costs and quality in the face of international competition. The main challenge of Algeria to establish a diversified economy and attracting the creative IDE of added value implies deep structural reforms referring to good governance and the valuation of know-how.
Abderrahmane Mebtoul
University professor
International expert