Describes the preliminary findings of IMF staff at the conclusion of certain missions (official staff visits, in most cases to member countries). Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, and as part of other staff reviews of economic developments.

The Socialist People’s Libyan Arab Jamahiriya —2009 Article IV Consultation Preliminary Conclusions of the IMF Mission1

Tripoli, June 1, 2009

I. Recent Economic Developments

1. The Libyan authorities have launched a number of initiatives over the past few years to modernize the economy. Notable progress has taken place in bank privatization, state budget unification, and encouraging the private sector, domestic and foreign. These achievements have contributed to the favorable sovereign ratings assigned to the country earlier this year by international rating agencies. The authorities are aware of the many challenges that remain to be addressed in order to achieve their objectives of increasing non-oil growth and creating viable employment opportunities.

2. The impact of the global financial crisis on Libya has been thus far limited to the decline in oil revenue. This was due to the lack of exposure of domestic banks to the global financial system. In addition, Libya's foreign assets consist mainly of foreign reserves, which are highly liquid, and the portfolio of the Libyan Investment Authority (LIA). The LIA started operations in June 2007 and a large part of its assets consists of bank deposits.

3. Preliminary data indicate that real GDP grew by about 3.8 percent in 2008. This reflected strong growth in non-oil activities (8 percent). Oil output increased slightly in the first three quarters of the year then declined in the last quarter in line with OPEC’s decision to reduce quotas. As a result, production for the year as a whole was similar to its 2007 level. Inflation rose in 2008 to about 10 percent due to higher food prices and a marked increase in public expenditure.

4. The fiscal surplus remained at about 25 percent of GDP in 2008. Revenue increased by about 37 percent due to higher oil export prices and enhanced tax and customs administration. On the other hand, overall expenditure increased by an estimated 45 percent, reflecting 42 and 47 percent increases in current and capital outlays, respectively. Spending under the Wealth Distribution Program (WDP) was limited to LD 3.3 billion (equivalent to about 3 percent of GDP), compared to LD 4.6 billion approved in the budget.

5. The external current account surplus remained substantially high at about 41 percent of GDP in 2008. The rapid increase in imports (29 percent) was more than offset by a sharp rise in oil exports, resulting in a further build up of the net foreign assets of the Central Bank of Libya (CBL) and the LIA to about $136 billion.



II. Macroeconomic Outlook

A. Outlook: The Large Public Expenditure Will Moderate the Economic Slowdown

6. Real growth is projected to decelerate to about 2 percent in 2009, mainly reflecting an expected reduction in oil production by about 1.5 percent. However, non-oil activities are projected to grow at around 6 percent, which is high by regional and global comparison. Over the medium term, this performance is projected to continue to strengthen, while oil output is expected to recover and steadily grow with the planned expansion in production capacity. Inflation is expected to decelerate substantially in 2009 (to about 5 percent), in line with the decline in international commodity prices, and to moderate further over the medium term.

7. The overall fiscal position is expected to register a surplus of about 10 percent of GDP in 2009 despite the projected decline in oil revenue by almost 40 percent. This is due to prudent public expenditure plans, which are expected to result in a small decline in public outlays after the very large increases in recent years. This reflects a reduction in capital spending by 20 percent and a 25 percent increase in current outlays. The overall fiscal balance is expected to strengthen steadily over the medium term with the projected increases in oil output and prices, which exceed the planned increases in public expenditure.


8. In line with the above developments, the external current account surplus is projected to narrow to about 17 percent of GDP in 2009. As a result of OPEC’s output cuts and the sharp decline in oil prices, its exports are expected to fall by about 40 percent. Imports, on the other hand, are projected to increase by about 6 percent, broadly in line with non-oil GDP growth. Net foreign assets of the CBL and the LIA will continue to increase, albeit at a slower pace than recent years, to about $150 billion (equivalent to almost 250 percent of GDP) by end-2009. Further increases are projected over the medium term.

9. This medium-term outlook is subject to possible downside risks relating to a further worsening in global economic conditions or a wavering of the efforts to improve the quality of public expenditure. In particular, a more severe global recession could lead to a further reduction in both oil and non-oil growth. The prospects for inward foreign investment may also weaken. If these risks materialize, economic growth, as well as the fiscal and external balances, would be smaller than the above projections.

III. Policy Discussions

A. Fiscal Policy

10. The authorities’ overall fiscal stance strikes an appropriate balance between short and long term considerations. The small decline in public expenditure planned for 2009 is prudent. It is a clear break with the very large increases in recent years, which have raised concerns about expenditure quality. At the same time, it reflects an appropriate decision to not allow the sharp reduction in oil revenue to translate into an abrupt reduction in public expenditure, with adverse implications for domestic economic activity, vital social and economic development programs, and projects that have already been initiated, with large sunk investments.

11. The authorities should, however, focus on the quality and composition of expenditure. In this connection, they are encouraged to reconsider the planned increase in the wage bill in 2009. The 14 percent planned increase is in large part due to the return to the civil service payroll of a portion of the large number of public employees that were previously transferred to a central labor office for retrenchment to the private sector. This development goes against the intention to reduce the size of the government and encourage the private sector. Apparent increases in other current outlays mostly reflect either improvements in classification or increased external grants to lower income countries. For example, part of previously implicit subsidies have now become explicit.

12. It is crucial to continue to advance the effort to strengthen public finance management. In this regard, the recent merging of the ministries of planning and finance is a welcome step, which will help enhance public expenditure planning, monitoring, and control. It would be important in the period ahead to improve the legal and administrative framework governing the state budget, with a view to streamline and modernize procedures. This would reduce the need for implementing investment programs through funds outside the new ministry. The 2009 budget is already allocating the equivalent of about 5 percent of GDP to such funds. While these funds offer greater flexibility than budgetary expenditure, they increase the magnitude of quasi-fiscal operations. Furthermore, even though these funds are intended to operate on a commercial basis and engage in activities where the private sector is absent or has a minor involvement, they can become under pressure to deviate from such objectives. A further proliferation of such funds would complicate public expenditure management, increase the potential for losses and price distortions, and crowd out the private sector. Strategic projects that are not sought by the private sector should be implemented either through the state budget or in the context of public-private partnerships with adequate safeguards.

13. The mission welcomes the intention of streamlining the bank accounts of government entities. An establishment of a treasury single account (TSA) at the central bank would importantly support this effort. A TSA would substantially enhance the management of cash flows. Staff stands ready to provide detailed technical advice in support of establishing a TSA and of the efforts to enhance the classification of expenditure and casting the annual state budget within a medium term framework.

14. The mission welcomes the decision to postpone the WDP. If the WDP program goes forward, it should be limited in scope and replace to the extent possible existing subsidies with more efficient well-targeted transfers.

15. The transparent start of the LIA in 2007 was encouraging. The authorities continue to enhance the LIA’s operational and legal framework. In this connection, to best serve its core objectives, the focus of the LIA should be on conservative investments abroad on a commercial basis.

B. Monetary Policy and Financial Sector Reforms

16. It is crucial to address the factors behind the large liquidity in the banking system. In particular, on-lending of government funds by specialized credit institutions (SCIs) has been both hampering commercial banks’ ability to conduct financial intermediation and contributing to excess liquidity. Furthermore, in the absence of a TSA, there are very large balances of government entities in the banking system. These factors have contributed to a liquidity overhang as evidenced by the large excess reserves. Addressing them would help increase the effectiveness of monetary policy tools. It would also help enhance commercial banks’ financial intermediation and, thus, their role in promoting a viable private sector-led growth.

17. The introduction in May 2008 of CBL’s certificates of deposit (CDs) was an important step in modernizing the monetary policy framework. They are currently issued at a fixed interest rate and have a single maturity (91 days). The mission supports the CBL's plan to expand the range of maturities for the CDs (especially by adding shorter maturities) and to develop an auction mechanism for them.

18. The mission welcomes the reduction of the budget allocation to SCIs and the initiation of a study on reforming them. It would be important to substantially strengthen their supervision by CBL and to steadily roll back their size and scope of operation to the norm for development banks. Converting them into commercial banks would be very risky in view of their weak technical capacity and the potential size of their NPLs.


19. Ongoing efforts to modernize the CBL and to strengthen supervision are commendable. The recent establishment of a credit bureau and the forthcoming production of financial stability reports are particularly noteworthy. Further efforts are, however, needed in improving coordination between the off-site and on-site supervisory units and to build capacity through additional staffing of qualified personnel and training.

20. Bank restructuring and privatization are making progress. An asset management company to deal with some of the bad loans has been established, capital requirements are being raised, and smaller banks are being encouraged to seek well-established foreign strategic partners. The mission welcomes the CBL’s progress in selling its shares in banks.

C. The Exchange Rate

21. The dinar’s peg to the SDR has served the economy well. This arrangement provides a strong monetary anchor, while allowing some flexibility in the dinar’s exchange rate vis-à-vis individual major currencies. Preliminary econometric estimates indicate that the dinar’s real effective value against other currencies has shifted from a moderate undervaluation in 2008 to a moderate overvaluation in 2009, in line with the developments in oil prices. These estimates, however, are not reliable or accurately point to the appropriate level of the equilibrium rate. The mission does not recommend any change in the policy or level of the exchange rate.
D. Other Structural Reforms

22. Progress has been made in customs and tax administration. However, the “service fee” on imports has recently been increased from 4 to 10 percent, and other ear-marked fees remain in place. The mission welcomes the recent decision to streamline exemptions, and encourages the authorities to adopt low income and corporate tax and customs rates, with very few brackets and limited exemptions. Furthermore, it would be useful to modernize the taxation system, with a view to gradually moving to self-assessment and risk-based auditing.

23. It would also be important to further enhance the regulatory framework in order to improve the business climate. All the above reforms would support the growth of private sector, diversification, and the creation of viable employment opportunities.

24. The mission urges the authorities to continue to improve economic and financial statistics and accounting standards in line with international practices in order to better guide analysis and policy making. In this connection, it welcomes the completion of a household budget survey in 2008 and the recent steps made to improve inter-agency cooperation on external trade statistics. The staff stands ready to continue to support the ongoing reforms in the areas of its expertise.


1 An IMF mission, led by Mr. Khaled Sakr, visited Libya during May 17–June 1, 2009 to conduct discussions for the 2009 Article IV consultation.This concluding statement summarizes the preliminary findings and recommendations of the mission. The mission would like to thank the authorities for their excellent cooperation and hospitality.

 
Table 1. Libya: Selected Economic and Financial Indicators, 2005–10
 
 
    Prel. Proj. Proj.
  2005 2006 2007 2008 2009 2010
 
  (Annual percentage change, unless otherwise indicated)
National income and prices            
  Real GDP 9.9 5.9 6.0 3.8 2.1 5.4
    Nonhydrocarbon 13.6 7.9 9.9 8.0 6.0 7.0
    Hydrocarbon 7.2 4.3 2.8 0.0 -1.5 3.7
  Nominal GDP in billions of Libyan Dinars 59.5 72.3 87.6 114.0 78.2 95.6
  Nominal GDP in billions of U.S. dollars 44.0 56.5 71.7 89.9 59.9 73.2
  Per capita GDP in thousands of U.S. dollars 7.5 9.5 11.8 14.5 9.5 11.3
  CPI inflation (average) 2.9 1.4 6.2 10.4 5.0 4.5
 
  (In percent of GDP)
Central government finances            
  Revenue 62.9 62.4 60.8 64.0 66.5 64.9
  Expenditure and net lending 33.5 31.0 35.3 39.3 55.9 49.1
  Overall balance 29.4 31.4 25.5 24.6 10.6 15.8
  Non-oil balance -29.1 -26.2 -29.0 -32.7 -42.6 -37.2
  Non-oil balance (in percent of non-oil GDP) -130.4 -135.3 -136.0 -165.8 -131.8 -124.6
 
  (Change in percent)
Money and credit            
  Money and quasi-money 10.6 16.0 40.1 47.8 14.0 18.0
  Net credit to the government -97.3 -60.9 -22.2 -17.7 -16.5 -15.8
  Credit to the economy 7.7 11.6 14.5 12.5 13.7 15.6
  Discount rate 1/ 4.0 4.0 4.0 5.0 4.0
 
  (In billions of U.S. dollars; unless otherwise indicated)
Balance of payments            
  Exports 31.4 39.2 47.0 62.0 37.5 47.4
  Imports 11.2 13.1 17.7 21.7 23.0 24.8
  Current account balance 17.1 25.2 29.1 36.6 10.0 17.2
    (As percent of GDP) 38.9 44.6 40.7 40.7 16.8 23.5
  Overall balance 13.8 19.8 20.2 16.8 5.3 12.1
 
Reserves            
  Total foreign assets (NFA + LIA investments) 54.3 74.8 98.3 136.1 147.4 166.1
    Net international reserves 38.4 52.7 48.5 49.4 53.4 57.6
    In months of next year's imports 28.9 31.0 22.9 22.0 22.0 22.0
             
Exchange rate 1/            
  Official exchange rate (LD/US$, period average) 1.35 1.28 1.22 1.27 1.31
  Official exchange rate (LD/US$, end of period) 1.35 1.29 1.22 1.25 1.30
  Real effective exchange rate (change in percent) -1.8 -0.6 -0.3 6.0 8.2
             
Crude oil production (millions of barrels per day) 1.69 1.76 1.81 1.81 1.78 1.85
Libyan crude oil price (US$/bbl) 51.9 62.5 69.3 96.7 58.7 72.7
             
Memorandum item:            
  Total loans disbursed by SCIs (change in percent) 62.2 75.2 27.6 9.6 ... ...
 
 
Sources: Libyan authorities and Fund staff estimates and projections.
1/ The 2009 data are for end-March.



 
Table 2. Libya: Consolidated Fiscal Operations, 2005–10
 
        Budget 1/   Budget 1/ Proj.2/ Proj.2/
  2005 2006 2007 2008 2008 2009 2009 2010
 
(In millions of Libyan dinars)
 
Total Revenue 37,413 45,153 53,222 51,015 72,898 43,705 51,984 62,037
  Hydrocarbon 34,764 41,630 47,747 43,048 65,365 35,499 41,632 50,630
  Nonhydrocarbon 2,650 3,523 5,475 7,967 7,532 8,206 10,353 11,408
    Tax Revenue 1,526 1,786 2,531 3,020 3,531 4,234 4,350 4,817
      Taxes on income and profits 397 691 1,376 2,169 2,790 3,000 3,100 3,456
      Taxes on international trade 517 527 528 600 499 1,000 1,000 1,080
      Other taxes and fees 611 569 627 251 241 234 250 280
    Nontax Revenue 1,124 1,736 2,944 4,947 4,002 3,972 6,002 6,591
      of which: LIA 1,438 3,000 2,021 1,527 1,527 1,803
 
Total Expenditure 19,930 22,449 30,881 50,542 44,835 45,972 43,678 46,961
  Current expenditure 8,245 9,693 12,375 19,050 17,579 22,683 22,039 24,179
      Wages and salaries 4,258 4,772 7,316 7,890 7,764 9,018 8,874 9,717
      Other 3/ 2,391 2,652 2,962 3,086 2,829 3,950 3,450 3,777
    Subsidies and transfers 1,497 1,564 2,097 8,074 6,986 9,715 9,715 10,684
      Subsidies 4/ 1,050 1,050 1,006 1,300 1,300 3,302 3,302 3,533
      Social Security Fund and other obligations   514 1,091 2,152 2,349 2,913 2,913 3,248
      Other transfers 5/ 4,622 3,337 3,500 3,500 3,903
  Capital expenditure 11,685 12,756 18,506 31,491 27,257 23,289 21,639 22,782
    Development budget 7,570 10,079 12,137 27,475 22,610 20,000 18,500 19,333
    National Oil Company 6/ 930 1,138 2,903 2,516 2,227 1,500 1,500 1,800
    GMR 7/ 765 960 1,231 1,081 1,070 789 789 1,000
    Net lending 2,420 580 2,235 1,500 1,350 1,000 850 650
 
Overall balance 17,483 22,704 22,341 474 28,062 -2,267 8,306 15,077
 
Financing -17,483 -22,704 -22,341 607 -28,062 2,268 -8,306 -15,077
  Banking system -17,485 -21,590 -12,671 607 -12,325 -2,992 -13,566 -15,077
    Surplus carried over 0 0 -3,200 607 820 6,788 6,788 0
    Other -17,485 -21,590 -9,471 0 -13,144 -9,780 -20,354 -15,077
  Nonbank financing 2 -1,114 -10,901 0 -15,738 5,260 -1,527
( In percent of GDP )
Total Revenue 62.9 62.4 60.8 44.8 64.0 55.9 66.5 64.9
  Hydrocarbon 58.5 57.5 54.5 37.8 57.4 45.4 53.3 52.9
  Nonhydrocarbon 4.5 4.9 6.3 7.0 6.6 10.5 13.2 11.9
Total Expenditure 33.5 31.0 35.3 44.3 39.3 58.8 55.9 49.1
  Current expenditure 13.9 13.4 14.1 16.7 15.4 29.0 28.2 25.3
    Wage and salaries 7.2 6.6 8.4 6.9 6.8 11.5 11.4 10.2
    Subsidies and transfers 2.5 2.2 2.4 7.1 6.1 12.4 12.4 11.2
  Capital expenditure 19.7 17.6 21.1 27.6 23.9 29.8 27.7 23.8
Overall balance 29.4 31.4 25.5 0.4 24.6 -2.9 10.6 15.8
 
Sources: Ministry of Finance; and Fund staff estimates and projections.
1/ Based on staff's classification.
2/ Based on staff's projections of prices and production.
3/ For 2008, includes an estimate of LD 500 for National Oil Company other spending.
4/ Prior to 2008 includes subsides for food and medicine. Starting 2008, also includes fuel, electricity, and water subsides.
5/ Covers allocations budgeted to the Wealth Distribution Program in 2008. With the posponment of the program, LD 1.2 billion out of the LD 3.3 in 2008 were allocated to the Economic and Social Development Fund (ESDF). In 2009, the amount is budgeted for the ESDF.
6/ For 2005 and 2006 the numbers are for extrabudgetary capital spending financed through the oil reserve fund. For 2008 staff excludes wages (million LD 1073) and an estimate for Other (million LD 500). For 2009 Budget includes million LD 1,000 financed by borrowing.
7/ For 2008 excludes wages and other spending for million LD 34 and million LD 39, respectively.



 
Table 3. Libya: Monetary Survey, 2005–10
 
 
          Proj. Proj.
  2005 2006 2007 2008 2009 2010
 
 
  (In millions of Libyan dinars)
             
Net foreign assets 56,422 79,434 100,744 124,830 138,410 154,845
  Central bank 54,448 77,241 98,305 121,257 133,150 148,866
    Foreign assets 54,460 77,253 98,323 121,269 133,165 148,882
    Foreign liabilities 12 13 17 12 15 16
  Deposit money banks 1,974 2,193 2,438 3,573 5,260 5,978
    Foreign assets 2,046 2,297 2,458 3,705 5,400 6,100
    Foreign liabilities 72 105 19 132 140 122
             
Net domestic assets -40,948 -61,490 -75,604 -87,679 -96,057 -104,869
  Domestic credit -26,611 -47,178 -58,414 -69,328 -81,152 -93,976
    Net claims on government -35,459 -57,048 -69,719 -82,044 -95,610 -110,687
      Central bank claims 64 1,795 2,399 141 164 190
      Government deposits with central bank 33,038 55,043 67,257 72,603 84,608 97,950
      Commercial banks' claims 373 373 328 174 203 235
      Governments' deposits with commercial banks 2,858 4,174 5,189 9,756 11,369 13,162
    Claims on the rest of the economy 8,848 9,871 11,305 12,716 14,458 16,711
      Claims on nonfinancial public enterprise 4,271 5,128 6,019 4,972 5,320 5,746
      Claims on the private sector 4,576 4,742 5,286 7,744 9,138 10,966
      Claims on specialized banking institutions 0 0 0 0 0 0
      Claims on nonbank financial institutions 0 0 0 0 0 0
  Other items (net) -14,337 -14,312 -17,190 -18,351 -14,905 -10,893
             
Broad money 15,475 17,943 25,140 37,151 42,353 49,976
  Money 12,077 13,725 18,387 26,573 30,093 35,387
    Currency in circulation 3,309 3,933 4,581 5,608 6,670 7,844
    Demand deposits 8,769 9,792 13,806 20,965 23,422 27,543
  Quasi-money 3,397 4,219 6,753 10,578 12,260 14,589
             
  (Change in percent)
             
Broad money 10.6 16.0 40.1 47.8 14.0 18.0
  Money 14.6 13.6 34.0 44.5 13.2 17.6
  Quasi-money -1.7 24.2 60.1 56.7 15.9 19.0
Net claims on government -97.3 -60.9 -22.2 -17.7 -16.5 -15.8
Claims on the economy 7.7 11.6 14.5 12.5 13.7 15.6
             
  (Percent change over beginning broad money stock)
             
Net foreign assets 158.6 148.7 118.8 95.8 36.6 38.8
Domestic credit -120.4 -132.9 -62.6 -43.4 -31.8 -30.3
Net claims on government -125.0 -139.5 -70.6 -49.0 -36.5 -35.6
Claims on the economy 4.5 6.6 8.0 5.6 4.7 5.3
 
Sources: Central Bank of Libya; and staff projections.



 
Table 4. Libya: Balance of Payments, 2005–10
(In millions of U.S. dollars)
 
        Prel. Proj. Proj.
  2005 2006 2007 2008 2009 2010
 
Current account 17,119 25,179 29,144 36,601 10,037 17,219
  In percent of GDP 38.9 44.6 40.7 40.7 16.8 23.5
             
Goods and services 18,359 24,230 27,618 37,718 11,783 19,624
  Goods 20,175 26,125 29,269 40,292 14,512 22,571
    Exports (f.o.b) 31,358 39,187 46,970 61,950 37,469 47,365
      Hydrocarbon sector 30,458 38,207 45,801 60,711 36,168 45,999
      Other exports 900 980 1,169 1,239 1,301 1,366
    Imports (f.o.b) -11,183 -13,062 -17,701 -21,658 -22,957 -24,794
  Services -1,816 -1,895 -1,650 -2,574 -2,728 -2,947
    Receipts 534 967 1,064 1,170 1,240 1,339
    Payments -2,350 -2,862 -2,714 -3,744 -3,969 -4,286
             
Income -281 1,075 2,267 365 -375 -865
  Direct investment income -1,834 -2,278 -2,326 -3,368 -3,840 -4,628
  Other investment income 1,553 3,353 4,593 3,733 3,465 3,763
             
Current transfers -959 -126 -741 -1,482 -1,371 -1,540
  General government -112 926 544 -75 -79 -83
  Private -847 -1,052 -1,285 -1,407 -1,293 -1,457
    Oil sector -259 -220 -370 -400 -238 -303
    Workers Remittances -588 -832 -957 -1,007 -1,054 -1,154
             
Capital and financial account 21 -4,992 -9,554 -21,039 -4,736 -5,128
  Direct investment 1,448 1,479 756 -1,777 1,264 1,472
  Portfolio investment -393 -1,960 -1,440 -10,964 -4,000 -4,400
  Other investment -1,034 -4,511 -8,870 -8,298 -2,000 -2,200
             
Errors and omissions -3,377 -348 596 1,269 0 0
             
Overall balance 13,764 19,839 20,187 16,831 5,301 12,090
  In percent of GDP 31.3 35.1 28.2 18.7 8.9 16.5
             
Memorandum Items (in billions of US$)
  Total foreign assets (NFA + LIA investments) 54.3 74.8 98.3 136.1 147.4 166.1
    LIA investments (not included in NFA) 14.0 14.7 18.0 39.0 45.0 51.6
    Net foreign assets at CBL 40.3 60.1 80.3 97.1 102.4 114.5
      Deposits by LIA/ORF and the government at CBL 1.9 7.4 31.8 47.7 49.1 56.9
    Net international reserves 38.4 52.7 48.5 49.4 53.4 57.6
      In months of next year's imports 28.9 31.0 22.9 22.0 22.0 22.0
  Nonhydrocarbon exports (growth in percent) 2.6 8.9 19.3 6.0 5.0 6.0
  Imports (growth in percent) 36.4 11.6 22.3 29.1 6.0 8.0
 
             
Sources: Central Bank of Libya; and Fund staff estimates and projections.



 
Table 5. Libya: Illustrative Medium-Term Scenario, 2005–14
 
 
  Prel. Projections
  2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
 
 
 
  (In percent of GDP unless otherwise indicated)
 
Real GDP growth rate (in percent) 9.9 5.9 6.0 3.8 2.1 5.4 6.2 7.6 7.3 7.1
Real nonhydrocarbon GDP (in percent) 13.6 7.9 9.9 8.0 6.0 7.0 7.0 7.5 7.5 7.5
Crude oil production (in millions of barrels/day) 1.69 1.76 1.81 1.81 1.78 1.85 1.95 2.10 2.25 2.40
WEO oil price (US$ per barrel) 53.4 64.3 71.1 97.0 60.5 74.5 78.0 80.0 81.3 82.5
CPI (percent change; average) 2.9 1.4 6.2 10.4 5.0 4.5 3.5 3.0 3.0 3.0
                     
Total revenue, of which: 62.9 62.4 60.8 64.0 66.5 64.9 65.6 65.4 65.4 65.9
  Hydrocarbon 58.5 57.5 54.5 57.4 53.3 52.9 53.3 53.4 53.5 53.7
  Nonhydrocarbon 4.5 4.9 6.3 6.6 13.2 11.9 12.3 12.0 11.9 12.3
Total expenditure 33.5 31.0 35.3 39.3 55.9 49.1 47.9 46.7 46.1 45.7
  Current 13.9 13.4 14.1 15.4 28.2 25.3 24.9 24.7 24.6 24.5
  Capital 19.7 17.6 21.1 23.9 27.7 23.8 23.0 22.0 21.5 21.2
Overall budget balance 29.4 31.4 25.5 24.6 10.6 15.8 17.7 18.7 19.3 20.2
Nonhydrocarbon balance (deficit -) -29.1 -26.2 -29.0 -32.7 -42.6 -37.2 -35.6 -34.6 -34.2 -33.5
                     
Consumption 1/ 31.4 34.5 37.0 30.2 46.1 42.0 40.9 40.6 40.4 40.2
  Private 20.4 24.0 25.2 20.9 30.4 27.9 27.1 26.9 26.8 26.8
  Public 11.1 10.5 11.7 9.3 15.8 14.1 13.8 13.8 13.6 13.5
Gross Domestic Investment 24.0 20.7 25.0 27.9 34.2 31.2 31.2 31.2 31.7 32.5
  Private 4.6 4.0 5.2 5.9 8.7 9.3 10.0 11.0 12.0 13.0
  Public 19.4 16.7 19.8 22.0 25.5 21.9 21.1 20.2 19.7 19.5
Gross savings 1/ 62.9 65.3 65.6 68.6 50.9 54.7 57.2 58.6 58.8 59.7
  Private 16.7 18.1 18.5 20.0 12.6 15.1 16.5 17.8 18.1 18.2
  Public 49.1 49.0 46.6 48.5 38.3 39.6 40.7 40.7 40.8 41.4
Saving/investment gap 38.9 44.6 40.7 40.7 16.8 23.5 26.0 27.4 27.1 27.2
                     
Real per capita private consumption (in Libyan Dinars) 2,221 3,082 3,618 3,462 3,222 3,401 3,453 3,615 3,769 3,913
 
 
Sources: Libyan authorities; and Fund staff estimates and projections.

1/ The shift in the distribution of consumption (and savings) between the public and the private sectors in 2008 reflects mostly transfers under the Wealth Distribution Program.



 
Table 6. Libya: Financial Soundness Indicators, 2005-2008 1/
 
         
  2005 2006 2007 2008
         
Core set:
         
Regulatory capital to risk weighted assets 19.1 17.2 17.6 16.2
Nonperforming loans net of provisions to capital 76.2 57.3 50.2 40.5
Nonperforming loans to gross loans 32.0 25.4 24.9 20.2
Return on assets 1.0 1.2 1.2 1.3
Retun on equity 18.6 22.2 26.6 32.9
Liquid assets to total assets 56.8 57.9 67.9 73.4
Liquid assets to short-term liabilities 107.6 104.3 117.2 124.0
Net open position in foreign exchange to capital 170.9 175.0 127.6 164.8
         
Encourged set:
         
Capital to assets 6.0 5.8 4.4 3.8
Foreign currency dominated asseets to total liabilities 0.3 0.4 0.1 0.3
 
 
Source: Central Bank of Libya

1/ FSIs need to be interpreted with caution due to remaining deficiencies in banks’ implementation of International Financial Reporting Standards. The figures are for the largest five banks representing 95 percent of total commercial banks’ assets in 2008


IMF EXTERNAL RELATIONS DEPARTMENT

Public Affairs    Media Relations
E-mail: publicaffairs@imf.org E-mail: media@imf.org
Fax: 202-623-6220 Phone: 202-623-7100