A team from the International Monetary Fund (IMF), led by Dmitry Gershenson, visited Tunis, Tunisia, from December 2 to 6. The visit aimed to discuss Libya's economic developments, macroeconomic outlook, and policy priorities. At the end of the visit, Mr. Gershenson issued a statement addressing several key points.
"We welcome the agreement to resolve the dispute over the leadership of the Central Bank of Libya (CBL). The settlement—reached in late September with the support of the UNSMIL and other international partners—appointed a new governor and a new Board of Directors of the CBL, a positive milestone after a decade of Board inactivity," he said. He emphasized that Libya needs an orderly process for leadership transition to foster stability and enhance governance.
The IMF staff and Libyan authorities broadly agreed on recent macroeconomic developments and projections. Following disruptions in oil production in August and September, GDP growth forecasts for 2024 have been revised downwards while expectations for 2025 have been adjusted upwards due to anticipated recovery in oil production.
The IMF staff highlighted downside risks such as lower-than-expected oil prices and political tensions which could affect fiscal space. "It is critical for the Libyan authorities to agree on spending priorities through an approved unified budget for 2025," Mr. Gershenson stated.
Fiscal expenditure control remains aligned with Libya's current macroeconomic framework. Discussions also included developing monetary policy tools to ensure efficient foreign exchange market functioning.
The IMF supports CBL’s initiatives to improve access to foreign exchange and address local currency shortages. Measures taken include reducing foreign exchange tax rates and regulating foreign exchange bureaus' activities. Efforts are being made to narrow gaps between official and parallel exchange rates while addressing liquidity issues in banking.
Structural reforms were also discussed, focusing on governance across public sectors and energy subsidy reforms accounting for around 20% of GDP. These subsidies are seen as limiting productive sector spending, with diversification away from hydrocarbons identified as a medium-term goal.
Progress in enhancing banking sector governance was noted alongside improvements in data collection and fintech innovation encouragement. The IMF plans further capacity development activities focusing on national accounts, consumer price index, reserve management, and monetary policy.
The next Article IV mission is scheduled for April 2025. The mission expressed gratitude towards Libyan authorities for their hospitality and constructive dialogue during this visit.