ALGIERS  - OPEC member Algeria's economy grew 2.3 percent in 2018 due to higher oil prices, the finance ministry said on Thursday, up from 1.4 percent the previous year but below a four percent government forecast.

The price of the country's oil exports last year averaged $72.43 a barrel, against $52.71 in 2017, it said.

Oil and gas account for 60 percent of the budget and 94 percent of total exports revenue.

The North African country also increased state spending for 2018 by 25 percent after a 14 percent cut in 2017.

Algeria has failed for now to develop its non-hydrocarbon sector, which grew four percent last year, up from 2.2 percent in 2017, according to the ministry's figures.

The government expects the economy to expand by 2.6 percent this year due to a 1.5 percent reduction in spending and lower energy revenue projection.

Oil and gas earnings should reach $33.2 billion, down from the $34.37 billion target for 2018, because of growing domestic consumption.

The government is benefiting from a recovery in global crude oil prices but a large proportion of energy revenue is still being used to pay for goods imports due to poor domestic production.

(Reporting by Hamid Ould Ahmed, Editing by Ulf Laessing, Toby Chopra, and William Maclean) ((mailto:hamid.ouldahmed@thomsonreuters.com;))