Libya flag Libya: Economic and Political Overview

The economic context of Libya

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Libya's economy is almost entirely dependent on oil and gas exports. In 2021, the country made significant progress towards institutional, political, economic, financial and military reunification in 2021, which resulted in a strong rebound of oil production. As such, the GDP grew by an estimated 123.2% of GDP in 2021, amid a strong recovery in oil prices and domestic oil output. That staggering growth, however, is expected to slow down and give way to a more moderate growth rate of 5.3% in 2022 and 5.5% in 2023.

Libyan oil and gas production accounts for nearly 60% of aggregate economic output and more than 90% of fiscal and export revenues. In 2021, oil activity in the country resumed, following the 2020 blockade on oilfields imposed by  military commander Khalifa Haftar, which were lifted in December of that same year. With that, a notable recovery was recorded both in the oil sector and the country's oil-dependent economy, with the current account going from a deficit of USD 2.35 billion in 2020 to a surplus of USD 5.25 billion in 2021. However, the country's inflation rate significantly increased over the same period, reaching 21.1% in 2021. Nevertheless, inflation should decrease to a more moderate rate in 2022, at around 8%, and 2023, when it is expected to reach 6.5%. Although Libya continued implementing policy responses to mitigate the impact of the COVID-19 pandemic in 2021, the country still faced a civil war and a divided government.

Continued inflation and low oil production exacerbated poverty in a country already ravaged by civil war and repeated terrorist attacks. The Tripoli government has implemented an active policy of job creation, especially in the public sector, but, according to Ministry of Labor, unemployment rate reaches 20%, and about half of all young people and a quarter of women remain without employment.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 39.50e19.21e27.3029.2029.99
GDP (Constant Prices, Annual % Change) 13.2e-59.7e123.25.35.5
GDP per Capita (USD) 6,0042,891e4,0694,3094,382
General Government Gross Debt (in % of GDP) 0.00.00.00.00.0
Inflation Rate (%) 0.22.821.18.06.5
Current Account (billions USD) 0.43-2.355.254.494.47
Current Account (in % of GDP) 1.1e-12.219.215.414.9

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Libya's 6.5 million population includes a work force of 2.5 million. Agriculture's share in Libya's economy is negligible, accounting for 1.8% of GDP and employing 16.4% of the workforce (World Bank). Main products include wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans, and cattle. Arid climate conditions and the poor quality of the soil severely limit agricultural production.

Industry is the backbone of the Libyan economy because of the strong petrochemical industry. It accounts for 77.5% of GDP, employing 24.4% of the active population (World Bank). Production includes petroleum, petrochemicals, aluminium, iron, steel, food processing, textiles, handicrafts, and cement. Although the Libyan petrochemical industry, especially the country's petroleum exports, were negatively impacted by the pandemic and the drop of oil prices, the sector showed signs of recovery in 2021.

Services account for 20.7% of GDP and its share in total employment stands at 59.1% (World Bank). Although this is the second largest sector in Libya, significant industries, such as tourism and retail, are significantly underdeveloped. Financial services and transportation, however, account for a significant part of the service sector. Even though the impacts of the pandemic were felt through the service sector both in 2020 and 2021, the sector wasn't as significantly hit as industry.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 16.4 24.4 59.2
Value Added (in % of GDP) 1.8 77.5 n/a

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

Find more information about your business sector on our service Market reports (keyword).

 
 

Find out all the exchange rates daily on our service International currency converter.

 
Find out more about Market Analysis about Libya on GlobalTrade.net, the Directory for International Trade Service Providers.
 
 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
3.44/10
World Rank:
81/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.
 

Return to top

 

Return to top

Any Comment About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Latest Update: April 2022

Return to top