Libya: Staff Concluding Statement of the 2023 Article IV Mission

IMF News, March 17, 2023

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The IMF resumed Article IV consultations with Libya after a decade-long hiatus.
The fragmentation of the country following the fall of the Ghaddafi regime in 2011 suspended production of key economic indicators and complicated policymaking.
Authorities have recently made commendable progress towards improving data collection, sharing and transparency.
The IMF’s new Fragile and Conflict-Affected States (FCS) strategy provided flexibility that helped pave the way for resumption of Article IV consultations.
The mission held discussions in Tunis, Tunisia during March 11-17, 2023.

Libya’s institutional framework helped the country through a period of significant macroeconomic volatility and turmoil.
There have been exceptional swings in oil production and revenues since 2011.
Measures taken by the Central Bank of Libya, including the currency’s devaluation, helped maintain a large stock of international reserves.
Looking ahead, the stability of the exchange rate will remain an important anchor for monetary policy.

Hydrocarbon production is projected to grow by around 15 percent in 2023.
Oil production increased from 1 million barrels per day in 2022 to around 1.2 million barrels per day in 2023.
Baseline projection (assuming fiscal spending remains contained) is for gradually declining fiscal and external surpluses over coming years.
Key risks to the outlook:
- Lower oil prices due to lower-than-expected global growth.
- Renewed conflict and/or social unrest that leads to disruptions in oil production.

There is an urgent need for a clear economic vision for the country.
The speed of the international mobilization to reduce carbon emissions and recent leaps in clean energy technology pose a risk of disorderly adjustment for economies dependent on oil.
Libya is at risk of falling behind these important global trends.
Libya faces the challenge of reducing its reliance on hydrocarbons while fostering stronger and more inclusive private sector-led growth.
Structural reform priorities:
- Strengthen institutions.
- Develop a more purposeful and transparent economic strategy for the future.
- Optimize the use of oil revenue to achieve economic diversification and improve living standards and inclusivity.
- Use reform efforts as an opportunity to rally the population behind a clear plan.

The mission thanks the Central Bank of Libya and other counterparts for their hospitality, constructive policy dialogue, and productive collaboration.
The IMF stands ready to continue to offer capacity development to enhance macroeconomic management and better prepare the country for post-conflict rebuilding efforts.

IMF staff concluding statement of the 2023 Article IV mission for Libya (mission held March 11-17, 2023).