The government projects economic growth of 4% in 2011, according to the 2011 budget, adopted by the Assemblée populaire nationale (parliament) in November, slightly higher than the Economist Intelligence Unit's own forecast of 3.5%. The government plans to spend AD6.6trn (US$86.3bn) and projects current revenue of AD3trn, leaving a deficit equivalent to 28% of GDP. The budget forecasts imports of US$37.6bn, exports of US$42.2bn, and non-hydrocarbons growth of 6% in 2011. The government is unlikely to run a deficit in 2011 however. The budget is based on an average oil price of US$37/barrel, but oil analysts forecast that the average oil price in 2011 is likely to be at least double that figure. We forecast oil prices in 2011 averaging US$82/b. Rising oil prices created a trade surplus of US$14.8bn in the first 11 months of 2010, up from US$4.7bn for the same period of the previous year, according to the latest data from the Centre national de l'informatique et des statistiques (CNIS, the state customs agency). Exports increased by 27% year on year over the same period, to US$51.3bn, whereas imports increased by a meagre 1.9%. A 26.2% increase in hydrocarbons export revenue was the main contributor to the strong export performance.

According to the latest annual report of the Banque d'Algérie (BdA, the central bank), the economy grew by 2.4% in real terms in 2009, despite a sharp decline in oil and gas receipts last year. Hydrocarbons income dropped by 6%, following declines of 0.9% in 2007 and 2.3% in 2008. The fall in oil and gas revenue was due to a combination of reduced output in line with tighter OPEC quotas and weaker prices on the international market. The volume of oil exports made by Sonatrach dropped by 17.2%, while the company's gas exports fell by 14.7%, a reflection of Algeria's trading partners cutting their orders to the minimum permissible under take-or-pay agreements and a fall in spot deals. The total value of exports in 2009 was US$45.2bn, a 42.5% drop compared with the previous year. The fall in hydrocarbons revenue meant the government suffered a fiscal deficit of AD668.8bn, equivalent to 6.6% of GDP.

Non-hydrocarbons income grew by 9.3% in 2009, attributable to increasing consumer spending and an excellent harvest brought about by good weather conditions and government loans and subsidies to the agriculture sector. The 2010 harvest is not expected to be as strong as the record 6.1m tonnes yielded in 2009, but a strong harvest is expected in 2011 after the Institut national du sol, irrigation et drainage (INSID) published data showing higher rainfall in September and October, a crucial growing period, than during the same period of 2009.