Libya: Summary of Findings from the 2024 Article IV Mission

The International Monetary Fund (IMF) has recently concluded a visit to Tunisia to discuss Libya’s economic and financial developments, highlighting the country’s need for a clear economic vision for the future. Despite facing various shocks, including a devastating tropical storm and conflicts in neighboring regions, Libya’s GDP growth has remained relatively stable, largely due to its reliance on energy exports.

In 2023, Libya experienced a fiscal expansion, with government revenues declining despite an increase in oil production. The country’s money supply also grew rapidly, reflecting the surge in fiscal expenditures. To address pressure on foreign reserves, the Central Bank of Libya implemented restrictions on foreign exchange purchases and announced a temporary tax on such transactions.

While reported inflation has remained low, the country’s current account surplus declined in line with falling oil prices. The outlook for Libya’s economy is heavily influenced by hydrocarbon production, with GDP projected to grow by close to 8 percent in 2024. However, the IMF emphasizes the need to address underlying pressures on the exchange rate and strengthen Libya’s fiscal framework to enhance macroeconomic resilience.

The IMF also calls for the full reunification of the central bank and comprehensive reforms in the banking sector to promote financial stability. Governance reforms are deemed necessary to address corruption concerns, while capacity development assistance is needed to improve data collection and policy advice.

Looking ahead, Libya is encouraged to diversify its economy away from hydrocarbons and focus on private sector-led growth. The IMF plans to conduct its next Article IV mission in the Spring of 2025, underscoring the importance of continued collaboration and dialogue with Libyan authorities.