IMF Executive Board Concludes the 2025 Article IV Consultation with Libya
IMF News, June 25, 2025
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- Published: June 25, 2025
Key Findings and Current Assessment
- The Executive Board concluded the Article IV Consultation with Libya; the decision was taken on a lapse-of-time basis.
- Real GDP growth is estimated to have declined to around 2 percent in 2024 from 10 percent in 2023, driven by a contraction in the hydrocarbon sector.
- Non-hydrocarbon growth remained robust in 2024 on the back of sustained government spending.
- Both the current and the fiscal accounts swung from a surplus in 2023 to a deficit in 2024.
- Reported inflation remained low.
Outlook and Projections
- The outlook is dominated by developments in the oil sector.
- Real GDP growth projections:
- Real GDP growth is projected to rebound in 2025, primarily driven by an expansion of oil production, before moderating to about 2 percent over the medium term.
- Following a rebound in oil production, economic growth is expected to be in double digits in 2025, before moderating over the medium term.
- Non-hydrocarbon growth is projected to remain between 5 and 6 percent in the medium term, supported by sustained government spending.
- Current account and fiscal projections:
- Current account: small surplus in 2025 (0.7 percent of GDP) before turning into a small deficit over the medium term as oil prices remain subdued.
- Fiscal balance: projected to remain in deficit—albeit at a much lower level than in 2024—under the weight of continued large government spending.
Risks
- Risks are tilted to the downside.
- Domestic risks:
- Continued political instability, potentially evolving into active conflict, could disrupt oil production and exports and prevent progress on economic reforms.
- External risks:
- Heavy dependence on oil exports and a large import bill expose the economy to adverse global economic and geopolitical developments and downward pressure on oil prices.
Policy Recommendations and Reform Priorities
- Fiscal policy and expenditure control:
- Controlling expenditure will be key to ensure sustainability and to achieving intergenerational equity.
- Authorities should agree on a unified budget that outlines priority spending and enhances transparency and credibility of government fiscal operations.
- Until a unified budget is agreed, resist pressures to increase spending on salaries and subsidies.
- Over the medium term, a sizable adjustment will be required to set the fiscal position on a sustainable trajectory; the adjustment should rationalize current spending (particularly wages and energy subsidies), mobilize non-oil revenues, while maintaining capital expenditures to support economic diversification.
- Monetary and exchange rate policy:
- Introduce a well-defined policy rate to enhance the CBL’s capacity to smooth the economic cycle, alleviate pressures on the dinar, and provide a benchmark for credit pricing by conventional and Islamic banks.
- Phase out the foreign exchange tax alongside other exchange restrictions in line with Libya’s Article VIII obligations to reduce distortions, lower reliance on the parallel market, and help unify the exchange rate.
- Financial sector and banking reforms:
- Introduce well-designed savings plans to reduce cash hoarding, expand banks’ deposit base, establish bank-customer relationships, and support credit provision to the private sector.
- Enhance transparency and accountability within the banking sector and promote financial literacy to foster confidence in banks and increase their footprint in Libya’s economy.
- Strengthen the AML/CFT framework, including alignment with international standards, to support correspondent banking relationships and ensure uninterrupted operations of Libyan banks.
- Structural and governance reforms:
- Forge a comprehensive reform program to reduce dependence on oil revenues and promote private sector-led growth.
- Key elements: enhance the business environment and access to finance, introduce labor market measures that encourage private sector employment, tackle corruption, strengthen governance, and enhance the rule of law.
- Data and statistical capacity:
- Enhance data provision and statistical capacity.
- Implement technical assistance recommendations in national accounts, external sector statistics, and monetary and financial statistics; improve data collection and reporting.
Selected Economic and Financial Indicators (Highlights from 2021–2030 table)
- Real GDP (at market price) annual percentage change:
- 2021: 28.3
- 2022: -8.3
- 2023: 10.2
- 2024: 1.9
- 2025: 16.1
- 2026: 4.4
- 2027: 1.6
- 2028: 1.7
- 2029: 2.2
- 2030: (not listed)
- Nonhydrocarbon annual percentage change:
- 2021: 5.9
- 2022: 7.9
- 2023: -0.6
- 2024: 14.3
- 2025: 2.9
- 2026: 4.2
- 2027: 4.8
- 2028: 5.3
- Hydrocarbon annual percentage change:
- 2021: 45.0
- 2022: -17.0
- 2023: 17.8
- 2024: -5.5
- 2025: 25.6
- 2026: 3.6
- 2027: 0.0
- Nominal GDP in billions of Libyan dinars:
- 2021: 159.0
- 2022: 208.2
- 2023: 211.9
- 2024: 234.3
- 2025: 251.2
- 2026: 254.2
- 2027: 265.5
- 2028: 277.9
- 2029: 292.0
- 2030: 306.6
- Nominal GDP in billions of U.S. dollars:
- 2021: 35.2
- 2022: 43.3
- 2023: 44.0
- 2024: 48.4
- 2025: 47.2
- 2026: 47.7
- 2027: 49.8
- 2028: 52.2
- 2029: 54.8
- 2030: 57.6
- Per capita GDP in thousands of U.S. dollars:
- 2021: 5.2
- 2022: 6.4
- 2023: 7.0
- 2024: 6.8
- 2025: 7.3
- 2026: 7.5
- 2027: 7.8
- Central government finances (percent of GDP) — Revenues:
- 2021: 79.5
- 2022: 85.8
- 2023: 73.6
- 2024: 69.8
- 2025: 67.9
- 2026: 61.1
- 2027: 58.5
- 2028: 56.6
- 2029: 54.5
- 2030: 52.4
- Central government finances — Of which: Hydrocarbon (percent of GDP):
- 2021: 78.1
- 2022: 83.9
- 2023: 71.6
- 2024: 55.4
- 2025: 62.1
- 2026: 59.2
- 2027: 56.7
- 2028: 54.7
- 2029: 52.6
- 2030: 50.4
- Expenditure and net lending (percent of GDP):
- 2021: 64.7
- 2022: 62.2
- 2023: 65.4
- 2024: 94.8
- 2025: 73.2
- 2026: 64.6
- 2027: 61.8
- 2028: 59.5
- 2029: 57.1
- Of which: Capital expenditures (percent of GDP):
- 2021: 10.9
- 2022: 8.4
- 2023: 8.7
- 2024: 34.6
- 2025: 20.1
- 2026: 12.8
- 2027: 12.1
- 2028: 11.4
- 2029: 11.0
- Overall balance (percent of GDP):
- 2021: 14.8
- 2022: 23.6
- 2023: 8.2
- 2024: -25.1
- 2025: -5.3
- 2026: -3.5
- 2027: -2.9
- 2028: -2.7
- 2029: -2.5
- Nonhydrocarbon balance (percent of GDP):
- 2021: -63.3
- 2022: -60.3
- 2023: -63.4
- 2024: -80.5
- 2025: -67.5
- 2026: -62.7
- 2027: -60.0
- 2028: -57.6
- 2029: -55.2
- 2030: -52.9
- Money and credit:
- Base Money annual percentage change:
- 2021: -16.9
- 2022: 47.9
- 2023: 6.6
- 2024: 36.8
- 2025: 9.0
- 2026: 9.2
- 2027: 10.0
- 2028: 16.7
- Currency in circulation annual percentage change:
- 2021: -20.0
- 2022: 37.6
- 2023: 13.3
- 2024: 10.5
- 2025: 1.5
- 2026: 5.0
- Net credit to the government (Libyan Dinar, billion):
- 2021: -94.1
- 2022: -114.9
- 2023: -110.9
- 2024: -128.8
- 2025: -130.4
- 2026: -121.4
- 2027: -112.7
- 2028: -104.6
- 2029: -96.8
- 2030: -89.3
- Balance of payments (in billions of U.S. dollars unless otherwise indicated) — Exports (selected years):
- 2021: 25.9
- 2022: 32.1
- 2023: 30.9
- 2024: 28.4
- 2025: 32.0
- 2026: 31.3
- 2027: 31.6
- 2028: 32.5
- 2029: 32.9
- 2030: 24.5 (noted in table)
- Imports (in percent of GDP, selected entries):
- 2021: 17.0
- 2022: 17.2
- 2023: 17.7
- 2024: 21.6
- 2025: 21.9
- 2026: 20.5
- 2027: 20.6
- Current account balance (percent of GDP):
- 2021: 5.7
- 2022: 8.0
- 2023: -2.0
- 2024: 0.3
- 2025: -0.3
- 2026: -0.2
- 2027: -0.1
- Capital Account (including E&O) (percent of GDP):
- 2021: 23.2
- 2022: 18.3
- 2023: -4.2
- 2024: 0.7
- 2025: -0.5
- 2026: -0.4
- Overall balance 2/ (percent of GDP and levels shown in table):
- 2021: -7.0
- 2022: -3.8
- 2023: 6.5
- 2024: -2.8
- 2025: -1.3
- Gross official reserves (in billions of U.S. dollars):
- 2021: 69.4
- 2022: 74.1
- 2023: 78.4
- 2024: 82.9
- 2025: 81.1
- 2026: 79.4
- 2027: 77.8
- 2028: 76.3
- 2029: 74.8
- 2030: 73.4
- Gross official reserves in months of next year's imports:
- 2021: 32.2
- 2022: 32.8
- 2023: 34.2
- 2024: 29.6
- 2025: 31.0
- 2026: 32.3
- 2027: 31.5
- 2028: 30.5
- Gross official reserves in percentage of Broad Money:
- 2021: 317.0
- 2022: 318.2
- 2023: 261.3
- 2024: 250.3
- 2025: 262.9
- 2026: 246.4
- 2027: 230.9
- 2028: 215.6
- 2029: 201.4
- 2030: 188.2
- Total foreign assets (in billions of U.S. dollars):
- 2021: 79.7
- 2022: 84.2
- 2023: 88.5
- 2024: 93.6
- 2025: 91.6
- 2026: 89.7
- 2027: 87.9
- 2028: 86.2
- 2029: 84.5
- Parallel market exchange rate (LD/US$, period average):
- 2023: 5.1
- 2024: 6.9
- Parallel market exchange rate (LD/US$, end of period):
- 2024: 6.1
- Crude oil production (millions of barrels per day - mbd):
- 2021: 1.2
- 2022: 1.0
- 2023: 1.4
- Of which: Exports 2021: 0.8; 2022: 0.9
- Crude oil price (US$/bbl) 3/:
- 2021: 64.4
- 2022: 89.6
- 2023: 75.0
- 2024: 66.9
- 2025: 62.4
- 2026: 62.7
- 2027: 63.6
- 2028: 64.3
- 2029: 64.9
Executive Board assessment and projections as presented in Press Release No. 25/217 (June 25, 2025).
