Libya flag Libya: Economic outline

Economic Outline

Economic Indicators

Libya's economy is almost entirely dependent on oil and gas exports, which account for approximately 95% of exports and government revenue. In 2020, the economy experienced a significant contraction due to an oil blockade and a decline in oil prices. This led to widening external and fiscal deficits, along with decreasing foreign exchange reserves. However, more recently, a rebound in oil prices and the resumption of oil production have resulted in budget and current account surpluses in both 2021 and 2022. Gross domestic product, closely linked to oil production, remained volatile throughout this period. According to the latest IMF estimates, GDP growth reached 12.5% in 2023 and should record increases of 7.5% and 6.9% in 2024 and 2025, respectively, although risks are tilted to the downside.

Since the revolution, there have been significant fluctuations in oil production and revenues. Despite these challenges, the Central Bank of Libya (CBL) has successfully maintained a substantial stock of international reserves. This has been achieved through a combination of a fixed exchange rate, capital controls, and temporary arrangements. Notably, Libya does not have any public debt and relies on monetary financing to cover deficits during years when oil revenues are insufficient to meet expenditures. Government spending is largely allocated to public sector salaries, with roughly 2.2 million people, accounting for one-third of the population, nominally employed by the public sector. Higher oil prices, increased production, and improvements in the security situation bolstered revenue in both 2021 and 2022. This positive trend more than offset the impact of removing a tax on foreign exchange transactions following the devaluation. Consequently, there were limited capital spending and fiscal surpluses in both years, amounting to USD 4.4 billion in 2021 and USD 6.4 billion in 2022 (IMF). Inflation has risen from 1.5% in 2020 to 4.5% in 2022, largely due to rising global food-price inflation, and was estimated at 3.4% in 2023 by the IMF.

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 the Ministry of Labor, the unemployment rate reaches 20%, and about half of all young people and a quarter of women remain without employment.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 37.8040.1943.9546.3547.77
GDP (Constant Prices, Annual % Change) -9.612.57.56.94.2
GDP per Capita (USD) 5,5775,8726,3576,6396,774
General Government Gross Debt (in % of GDP) 0.00.00.00.00.0
Inflation Rate (%) n/a3.42.92.92.9
Current Account (billions USD) 12.428.5411.6312.4810.87
Current Account (in % of GDP) 32.921.326.526.922.8

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Lybian Dinar (LYD) - Average Annual Exchange Rate For 1 GBP 1.881.791.821.751.79

Source: World Bank, 2015

 

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Latest Update: May 2024

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