A comment from an Algerian government minister has sparked an interesting debate about the real value of money — and whether €50 in Europe can really buy less than 3,000 Algerian dinars in Algeria.

At first, the statement appears almost impossible.

At the official exchange rate, €50 is worth considerably more than 3,000 Algerian dinars. In fact, the official euro-dinar rate is currently around 150–153 dinars to the euro, meaning €50 is worth roughly 7,500–7,700 dinars through the formal exchange system.

So how can anyone argue that 3,000 dinars can buy more?

The answer lies in a concept economists know well: purchasing power.

And Algeria provides a fascinating example of why simply converting one currency into another does not necessarily tell us what that money is worth to the person spending it.

The €50 versus 3,000 dinars test

Let us forget exchange rates for a moment.

Imagine putting €50 into the hands of someone in Spain and 3,000 dinars into the hands of someone in Algeria.

What can each person actually buy?

That is a much more interesting question than what the currencies are worth on the foreign-exchange market.

Take a basic Algerian shopping basket.

A medium-sized whole chicken might cost around 1,000 dinars. Two kilograms of potatoes might be around 300 dinars. A kilogram of fruit around 300 dinars, a litre of cooking oil around 250 dinars and a kilogram of dried beans around 300 dinars.

That gives us:

On those prices, 3,000 dinars would buy the entire basket, leaving 850 dinars.

That is where the minister’s argument begins to make sense.

But only up to a point.

Algeria is not Europe — and that matters

Algeria’s economy has developed in a very different way from the economies of Western Europe.

The country has enormous oil and natural-gas resources, and hydrocarbons remain central to government revenues and the wider economy. Energy revenues have enabled the state to support important parts of domestic consumption and keep some essential goods and services considerably cheaper than they would otherwise be.

Natural gas, for example, plays a major role in Algeria’s domestic energy system, while oil and gas remain crucial to exports and government revenues.

This creates an economy in which the price of basic necessities cannot simply be compared with European supermarket prices.

A potato grown in Algeria does not have to be priced according to what a Spanish consumer pays for a potato.

The same applies to locally produced vegetables, bread, poultry and other basic products.

But what happens in Spain?

Now take €50 to a Spanish supermarket.

The exact answer depends on where you shop, what you buy and whether you choose premium products or supermarket brands.

But €50 can certainly buy a substantial amount of basic food in Spain.

And that exposes the weakness in making the comparison too simple.

If we compare only the five products above, we need to establish current Spanish prices for genuinely comparable quantities and qualities.

The exercise may show that Algeria is cheaper for certain basic food products — but that does not automatically mean that 3,000 dinars has greater purchasing power than €50.

Why?

Because food is only one part of household spending.

What about rent?

This is where the comparison becomes much more complicated.

A household does not live on chicken, potatoes and beans alone.

It has to pay for housing.

It has to pay for electricity.

Transport.

Clothing.

Mobile phones.

Internet.

School expenses.

Healthcare.

Cars.

Appliances.

Electronics.

And, increasingly, imported products.

The moment we move from locally produced necessities to imported goods, the advantage of the Algerian dinar can look very different.

A smartphone does not become dramatically cheaper simply because it is being sold in Algeria.

Its underlying cost is connected to international supply chains, foreign currencies, shipping and imported components.

The same applies to computers, cars and many consumer products.

Then there is the exchange-rate problem

There is another complication that cannot be ignored.

Algeria has historically had a substantial gap between its official exchange rate and the parallel currency market.

Recent reporting has described the informal rate as substantially higher than the official rate. In January 2026, for example, reports put the parallel-market euro rate at around 280 dinars, compared with an official rate around 151 dinars.

The Algerian authorities have been tightening controls around foreign-currency transactions, with the 2026 Finance Law introducing stricter requirements affecting foreign currency brought into and taken out of the country.

This means that asking what €50 is “worth” in Algeria has two different answers depending on whether we are talking about the official banking system or the informal market.

That makes a simple comparison even more difficult.

But perhaps the minister was making a different point

The most charitable interpretation of the statement is not that 3,000 dinars is literally worth more than €50.

It is that 3,000 dinars can provide a surprisingly large amount of basic purchasing power inside Algeria.

And that is a much more defensible argument.

Currencies are not only units of foreign exchange.

They are also units of everyday life.

If a person earns their salary in dinars, pays their rent in dinars and buys locally produced food in dinars, the relevant question is not how many euros their salary would buy.

The relevant question is:

How much life can that salary purchase?

The real test is income

This is where the debate should really go.

Suppose an Algerian earns a certain monthly salary and spends a particular percentage of it on food.

Then compare that with a Spanish worker earning a Spanish salary and spending a particular percentage of their income on the same basic basket.

Now we have something meaningful.

We can calculate:

Cost of basket ÷ average disposable income

That tells us how much of a person’s purchasing power is consumed by essential food.

It is much more informative than simply saying:

3,000 dinars = €X.

Cheap food does not necessarily mean a richer population

This distinction is important.

A country can have very cheap food and still have relatively low household purchasing power if wages are also low.

Conversely, a country can have expensive food but much higher salaries, leaving households with more money after paying for necessities.

That is why economists use broader measures of purchasing power and living standards rather than simply comparing supermarket prices.

And Algeria’s situation is particularly interesting because the country has significant energy resources but also remains heavily dependent on hydrocarbons. Analysts continue to identify diversification and household purchasing power as important economic issues.

So, is 3,000 dinars really worth more than €50?

Not in the conventional sense.

At the official exchange rate, €50 is worth more than 3,000 dinars.

But that is not the end of the story.

For someone shopping for basic, locally produced food in Algeria, 3,000 dinars can indeed go a surprisingly long way.

For someone buying imported goods, travelling abroad or purchasing products priced according to international markets, the picture changes dramatically.

And for a household trying to maintain a reasonable standard of living, the most important figure is neither the exchange rate nor the price of one chicken.

It is income relative to the cost of everything the household needs.

The bigger lesson

Perhaps the real lesson from the minister’s comment is that currency value and purchasing power are not the same thing.

A euro may exchange for many dinars.

That does not automatically mean that everything in Algeria costs the equivalent European price multiplied by the exchange rate.

Local wages, subsidies, domestic production, energy prices, taxation, housing costs and the structure of the economy all influence what people can buy.

So the question should not really be:

“Is 3,000 dinars more valuable than €50?”

It should be:

“Where does €50 — or 3,000 dinars — provide the greater amount of everyday purchasing power for the person who earns and spends that currency?”

That is a much harder question.

And it is also a much more interesting one.

For ISN Magazine, that may be the real story: not whether Algeria is cheaper than Europe, but how two very different economic systems determine what a unit of money is actually worth to the people who spend it.