Exploring the Future of Libya’s Economy

Libya’s economy is primarily reliant on the oil and gas sector, which comprises 97% of overall exports, more than 90% of government revenues, and 68% of GDP. Libya’s real GDP growth rate was recorded at a significant 12.6% in 2023, thanks to reliable production of oil and security improvements. Demand increased in the economy due to increased private consumption and exports. Consequently, inflation dropped to 2.4%. However, deteriorating global oil prices lowered the current account surplus to 18.5% of GDP and the fiscal surplus to a mere 0.1% of GDP. On an upswing, foreign reserves are strong at $82 billion, and since the Central Bank was unified in August 2023, today’s legislative and executive authority governs bank entities in Libya – a positive development of the country. On a downside, unemployment rates remain too high at 19.3% in 2022, and arguably worse for youth aged 15-24 at 51.4%. We can project a growth rate of 7.9% in 2024 and 6.2% in 2025 assuming oil prices remain stable. Libya’s inflation was expected to show some constancy at 2.6% by 2025. Libya’s economic future remains in limbo because of political instability and other potential impacts due to global economic fluctuations.