The International Monetary Fund (IMF) has made preliminary findings from its Article IV mission to Libya, addressing economic factors affecting the country in 2024. Disputes over central bank leadership and disruptions in oil production have negatively impacted growth. However, the rebound in oil production to near 1.4 million barrels per day indicates recovery potential.
Inflation remained close to 2% in 2024, influenced by extensive subsidies and existing measurement issues, affecting around one-third of the consumer price index (CPI). The Bureau of Statistics and Census has introduced a revamped CPI to address these issues with expanded geographical coverage.
Preliminary analyses reveal fiscal and current account deficits in 2024, despite rising government spending and declining oil revenues. The banking sector has improved its capital and financial metrics, meeting Basel II requirements. Nonperforming loan ratios have decreased, and private sector credit growth has been strong, although limited to retail and public employee salary advances.
The IMF projects a rebound in Libya's real GDP growth in 2025, driven by increased oil production, with medium-term moderation expected. Non-hydrocarbon growth is expected to remain consistent with previous averages. Risks to the outlook include political instability and oil price volatility.
Efforts to establish a unified budget are emphasized to maintain fiscal credibility. The IMF advises against increasing spending on salaries and subsidies while enhancing public financial management. Substantial fiscal efforts are recommended for sustainability, including energy subsidy reforms and nonhydrocarbon revenue mobilization.
The Central Bank of Libya has devalued the dinar and tightened foreign exchange restrictions to relieve pressure on reserves. Developing an effective domestic monetary policy framework is urged to address macroeconomic conditions and the Libyan dinar's depreciation.
While new efforts in financial inclusion are welcomed, more is required to improve confidence in the financial sector. The IMF also highlights the need for governance reforms and anticorruption measures to support growth and private sector development. The next Article IV mission is scheduled for Spring 2026, with gratitude extended to Libyan authorities for their cooperation.