Algeria’s economic freedom score is 48.9, making its economy the 157th freest in the 2015 Index. Its overall score is 1.9 points lower than last year due to considerable declines in investment freedom and the management of government spending that outweigh improvements in freedom from corruption and monetary freedom. Algeria is ranked 14th among the 15 countries in the Middle East/North Africa region, and its score remains lower than both the regional and world averages.
Algeria’s economy has been on a declining path of economic freedom over the past five years. Having registered the seventh-largest overall score decline in the 2015 Index, the economy is now rated “repressed.” Public spending, bolstered by the hydrocarbon sector, has been expanding in recent years, undermining fiscal governance.
As policies to sustain regulatory efficiency and open markets have been neglected or even reversed, the economy has become more dependent on the state-dominated energy sector. Tariff and non-tariff barriers, coupled with burdensome business and investment regulations, continue to hamper development of a more dynamic private sector and interfere with much-needed diversification of the economic base.