Purpose - This study examines the macroeconomic effects of public spending in Algeria between 2000 and 2023, focusing on its role in growth, inflation, and employment within a resource-dependent economy. The research investigates how fiscal shocks, under different economic regimes, shape Algeria’s structural vulnerabilities and development trajectory. Design/methodology/approach – A Structural Vector Autoregressive (SVAR) model is employed to identify and analyze the transmission of fiscal shocks on GDP, inflation, and unemployment, with oil prices treated exogenously. To capture nonlinearities and regime-dependent behaviors, a Markov-Switching VAR (MS-VAR) framework complements the baseline model. Impulse response functions and variance decomposition are used to assess dynamic interactions. Findings – Results indicate that public spending generates short-term GDP gains, reduces unemployment, and induces inflationary pressures, but these effects are highly contingent on oil revenues. Regime-switching dynamics reveal that fiscal multipliers are stronger in stable periods and weaker during volatile or crisis regimes. Algeria’s persistent exposure to high-volatility regimes underscores structural fragility and fiscal dependence on hydrocarbons. Research limitations/implications - The analysis is limited by annual data availability and the specific modeling assumptions of SVAR/MS-VAR frameworks. Future studies could integrate sectoral expenditure data and higher-frequency series to enrich the robustness of findings. Practical implications – The findings stress the need for countercyclical fiscal buffers, diversification of revenue sources, and governance reforms to reduce oil dependency. Effective fiscal policy in Algeria requires adaptive frameworks that account for regime shifts and external shocks. Originality/value – This study enriches the literature on fiscal policy in rentier economies by combining SVAR and regime-switching approaches, highlighting the state-contingent nature of fiscal multipliers. It provides actionable insights for policymakers aiming to balance stabilization, growth, and resilience in volatile economic environments.