KEY POINTS
- Libya’s 2025 economic growth is supported by a rebound in oil production, reaching 1.4 million barrels daily.
- IMF praises Libya’s progress in energy subsidy cuts and diversifying its economy beyond oil reliance.
- Central Bank stabilizes Libya’s currency market through liquidity measures, reducing the gap between exchange rates.
Libya’s economy is expected to see substantial growth in 2025, fueled by a rebound in oil production and the execution of vital economic reforms, as stated by the International Monetary Fund (IMF).
As of December 2024, oil production hit 1.4 million barrels daily, supporting optimistic economic growth forecasts for the North African country.
Advancements in economic reforms
After a staff mission carried out in December . 2-6, the IMF commended Libya for progressing on essential economic reforms, including initiatives to lower energy subsidies, which make up 20% of the gross domestic product.
The reforms seek to broaden Libya’s economy away from its reliance on hydrocarbons and confront persistent financial issues.
Efforts to stabilize monetary policy
The Central Bank of Libya (CBL) has implemented important measures to stabilize the nation’s foreign exchange market and address currency shortages.
Crucial measures involve infusing liquidity into the banking sector, broadening electronic payment options and reducing the foreign exchange tax from 27 percent to 15 percent.
These actions reduced the difference between the official and parallel exchange rates from 13 percent in July to 8% in November.
The IMF highlighted the importance of enhancing monetary instruments to ensure market stability.
Difficulties and future perspectives
Despite advancements, Libya still struggles with financial issues, especially the substantial expense of energy subsidies.
The IMF advised the government to maintain its reform momentum and improve governance to lessen dependence on oil revenues and foster a more sustainable economic future.
As the nation readies for 2025, the dual factors of boosted oil output and reform initiatives lay the groundwork for revitalized economic stability and growth.
