Nine years after Algeria first activated the printing presses under the guise of “non-conventional financing,” the regime’s addiction to helicopter money remains firmly in place.
What was presented in 2017 as a temporary five-year lifeline to stave off bankruptcy has become a permanent fixture of fiscal mismanagement.
The Bank of Algeria continues to bankroll a high-spending state that lives far beyond its means, while ordinary Algerians face eroding purchasing power, a collapsing parallel dinar, and dwindling foreign reserves.
The 2017 decision by then-Prime Minister Ahmed Ouyahia to amend the Money and Credit Law and allow the central bank to lend directly to the Treasury was classic helicopter money printing dinars and injecting them straight into public coffers to buy time instead of undertaking genuine reforms.
By January 2019, 6,556 billion dinars- roughly one-third of GDP- had been created with no corresponding increase in real wealth.
The funds covered salaries, plugged deficits, bailed out Sonatrach and Sonelgaz, and propped up the national pension system.
The 2026 Finance Law further loosens the rules, allowing discretionary advances from the Bank of Algeria. The projected deficit of 5,000 billion dinars -around 12% of GDP -will be “entirely financed by domestic debt,” meaning the printing press, whether direct or intermediated through captive public banks, is still running.
The International Monetary Fund has repeatedly sounded the alarm. In its latest Article IV assessment, the Fund noted that central bank financing of the government increased in 2025, described the 10.5% of GDP deficit as “very high,” and urged an end to monetary financing.
The IMF also warned that Algeria could end up with only $19 billion of foreign exchange reserves in 2030 if no reforms were implemented.