flag Liberia Liberia: Economic Outline

Economic Indicators

Since 2021, Liberia has experienced consistent economic growth, albeit not at a pace sufficient to expedite poverty reduction efforts. Liberia's economy was still recovering from the recession caused by the Ebola virus, falling commodity prices, and the gradual withdrawal of the United Nations peacekeeping mission (UNMIL) when the Covid-19 pandemic broke out. In 2023, Liberia's economy grew by an estimated 4.7%, primarily fueled by mining, particularly gold production. However, growth in the primary sector was sluggish, with key agricultural outputs like rubber and crude palm oil declining by 2.0% and 10.7% year-on-year (y/y) respectively. The secondary sector expanded by 13.9%, driven by mining, with gold production rising by 16.4% (y/y) due to heightened international demand, while iron ore output increased by 1.0% (y/y). In manufacturing, cement production grew by 5.6% owing to increased construction activity. The services sector also expanded, albeit more modestly, by 3.8%. The economy is projected to grow by 5.4% in 2024 and to average 5.9% annually from 2024 to 2026 (data World Bank).

In 2023, Liberia's fiscal deficit remained high, standing at approximately 5.5% of GDP. This was primarily due to decreases in revenue and grants alongside increased consumption spending. The deficit was largely covered by concessional resources, including budget support loans and IMF Special Drawing Rights. In March 2024, the new government submitted a revised 2024 budget to the legislature for approval. Projections indicate the fiscal deficit is expected to decrease to an average of 3.3% of GDP in the medium term, as the government enhances domestic resource mobilization and expenditure controls (World Bank). As per the IMF estimates, the debt-to-GDP ratio stood at 52.3% in 2023. Headline inflation climbed to 10.1% in 2023, up from 7.6% in 2022, attributed to rises in transport and food prices, as well as a weakened Liberian dollar. However, tightening monetary policy is expected to alleviate inflationary pressures, reducing inflation to 5.4% by 2026. In 2023, the Central Bank of Liberia (CBL) implemented two policy rate hikes in May and July, totaling 500 basis points to reach 20.0%, aimed at curbing inflation. Additionally, the CBL eliminated the ceiling on the offered amount of CBL bills to manage oversubscription, absorb excess liquidity in the banking system, and enhance monetary policy operations. The financial sector maintained satisfactory capitalization, with a minimum capital adequacy ratio of 21.2%. The Liberian authorities remain committed to the reform program agreed with the IMF and aiming at preserving macroeconomic stability, promoting sustainable and inclusive growth, and addressing weaknesses in governance. Achieving macroeconomic stability is vital, but it must be complemented by institutional reforms, improvements in the business environment, and substantial enhancements to basic services and infrastructure to unleash the country's growth potential (World Bank).

Liberia remains a poor country, with a high unemployment rate (reliable figures are not available, but the World Bank modeled ILO estimate is 2.9% for 2023). It is among the five poorest countries in the world; however, the extreme international poverty rate (USD 2.15 per person per day) is estimated to have decreased by 1.1 percentage points to 31.3% in 2023, down from 32.4% in 2022. Liberia also has one of the highest infant and maternal mortality rates. The country’s GDP per capita (PPP) was estimated at only USD 1,570 in 2022.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 3.974.394.755.075.48
GDP (Constant Prices, Annual % Change) 4.84.65.36.26.2
GDP per Capita (USD) 749808855890941
General Government Gross Debt (in % of GDP) 53.955.756.557.757.9
Inflation Rate (%) 7.610.16.35.15.1
Current Account (billions USD) -0.76-1.16-1.18-1.24-1.30
Current Account (in % of GDP) -19.0-26.5-24.8-24.5-23.7

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Liberian Dollar (LRD) - Average Annual Exchange Rate For 1 GBP 138.39145.05192.191.251.28

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 40.6 8.1 51.3
Value Added (in % of GDP) 36.2 21.4 37.2
Value Added (Annual % Change) 7.4 7.7 1.4

Source: World Bank - Latest available data.

 

The Active Population in Figures

201820192020
Labour Force 2,165,3302,226,9932,193,679

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 77.49%77.28%77.08%
Men activity rate 81.51%81.11%80.74%
Women activity rate 73.48%73.44%73.42%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
49,2/100
World Rank:
164
Regional Rank:
42

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
98/180

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Sources of General Economic Information

Main Online Newspapers and Portals
Allafrica, Liberia News
Liberia Newspapers online
BBC profile
Useful Resources
Ministry of Trade and Industry
Ministry of Mines and Energy
Ministry of Agriculture
Central Bank
 
 

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Latest Update: May 2024

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