The oil counter-shock of 1986 dealt a heavy blow to a virtually rentier economy, during the period of anti-scarcity and stabilization plans.

In 2012, the Algerian economy remains highly dependent on hydrocarbon rents, which represent the country's main source of revenue, without having succeeded in diversifying and establishing internationally competitive industrialization.

The World Bank notes that the promulgation in 2022 of the new investment law and the publication of its implementing regulations, the abolition in 2020 of the 51/49 rule for non-strategic sectors, and the publication of the new hydrocarbons law in 2019 are positive steps, but must tackle the ecosystem, including paralyzing bureaucracy, with greater visibility in socio-economic policy.

This is a chart of trend of gross domestic product of Algeria at market prices estimated by the International Monetary Fund.

In March 2006, Russia agreed to erase $4.74 billion of Algeria's Soviet-era debt during a visit by President Vladimir Putin to the country, the first by a Russian leader in half a century.

[23][24] Some progress on economic reform, Paris Club debt reschedulings in 1995 and 1996, and oil and gas sector expansion contributed to a recovery in growth since 1995, reducing inflation to approximately 1% and narrowing the budget deficit.

The spike in oil prices in 1999–2000 and the government's tight fiscal policy, as well as a large increase in the trade surplus and the near tripling of foreign exchange reserves has helped the country's finances.

However, an ongoing drought, the after effects of the floods of 10 November 2001 and an uncertain oil market made prospects for 2002-03 more problematic.

The government has pledged to continue its efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector.

The government has continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, but has had little success in reducing high unemployment and improving living standards.

The government has announced plans to sell off state enterprises: sales of a national cement factory and steel plant have been completed and other industries are up for offer.

In the 2000s the country enjoyed several years of strong economic performance, with solid non-hydrocarbon growth, low inflation, an overall budget surplus and a positive trade balance.

[4] After having virtually eliminated external debt before 2013, the drop hydrocarbon prices and revenues has led to a large budget deficit which has been only partly offset by spending cuts.

However, the economy remains highly dependent on hydrocarbons, which represent 89% of total exports;[14] a continued slowdown of global energy demand has significantly put pressure on Algeria's fiscal and external positions.

[28] Algeria's economy includes a significant public sector built up under a policy of import substitution industrialization which remained intact after other developing nations liberalised their economies under the influence of structural adjustment programmes advocated by the World Bank and the International Monetary Fund towards the end of the 20th century.

[29] In addition, the social safety net in Algeria is stronger than in other countries in the region: it saw periods of expansion in the 1970s, and in the 2000s, helping to build stability after the Civil War.

However, local businesses have benefited from the state undertaking public works projects in the construction of roads, ports, dams and housing.

Government efforts to stimulate farming in the less arable steppe and desert regions have met with limited success.

Algeria is rich in minerals; the country has many iron, lead, zinc, copper, calamine, antimony and mercury mines.

Algerian onyx from Ain Tekbalet was used by the Romans, and many ancient quarries have been found near Sidi Ben Yebka, some being certainly those from which the long-lost Numidian marbles were taken.

One specific reform that has been achieved is the establishment in 2006 of the Algerian Real Time Settlements system, which facilitates the prompt and reliable electronic transfer of payments.

[31] The non-bank sector remains less developed, although recent reforms in the field of regulation and supervision have laid the foundations for leasing, factoring, and venture capital.

The insurance sector was liberalized in 1995, but is still dominated by government-owned institutions and so far accounts only for a very small part of the economy: total premium volume amounted to approximately 1 percent of GDP.

Based on 2006 and 2007 estimates, 31 percent of the total population has access to financial services, with one bank branch or post office every 7,250 inhabitants.

[38] Algeria's foreign currency reserves have grown rapidly since 2000, reflecting rising prices for exported oil.

New entrants to the workforce and the lack of emigration options make unemployment a chronic problem and an important challenge to the government.

Algeria has signed bilateral investment agreements with 20 different nations, including many European countries, China, Egypt, Malaysia, and Yemen.

In July 2001, the United States and Algeria agreed on a framework for discussions leading to such an agreement, but a final treaty has not yet been negotiated.

Currently, the World Bank is pursuing seven projects, specifically budget modernization, mortgage finance, natural disaster recovery, energy and mining, rural employment, telecommunications, and transportation.

In 2005 economic assistance to Algeria from the United States amounted to US$4.4 million, most of which was attributable to the Middle East Partnership Initiative (MEPI) and the remainder to International Military Education and Training (IMET).