Algeria's post-2014 oil-price shock and fiscal strain

Algeria's state budget had run modest deficits through the early 2010s while oil traded above 100 dollars a barrel, but international oil prices roughly halved over the second half of 2014 and into 2015, and since hydrocarbons fund the large majority of state revenue and almost all export earnings, the shock immediately spread through the public finances. Hydrocarbon revenue fell by around 30% even as government spending kept growing by roughly 10% in 2015, and the IMF's 2016 Article IV review found Algeria's overall budget deficit widened to an all-time high of 16.4% of GDP that year. The Bank of Algeria kept the dinar only gradually adjusted rather than allowing a sharp devaluation, so the adjustment fell mainly on the budget, financed by running down the Revenue Regulation Fund built up during the earlier boom years. The banking sector itself remained well capitalized and profitable through the episode, with little maturity mismatch, but the shock exposed how little Algeria's broader economy had diversified away from hydrocarbons despite two decades of elevated oil revenue, leaving fiscal policy hostage to a single, volatile commodity price.