Libya: Economic and Political Overview
In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response
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Libya's economy is almost entirely dependent on oil and gas exports. In 2022, the country continued to make significant progress towards institutional, political, economic, financial, and military reunification, which resulted in a strong rebound of oil and energy production, as well as an overall growth of the private sector. However, GDP registered an estimated negative growth of 18.5%. Nevertheless, the country's economy is expected to register positive growth in the coming years, with rates of 17.9% in 2023 and 8% in 2024.
Libyan oil and gas production accounts for nearly 60% of aggregate economic output and more than 90% of fiscal and export revenues. In 2022, oil activity in the country increased, and the government hopes to return to 2010 levels, when production reached its peak at 1.6 million bpd, within the next two or three years. With that, the country's oil-dependent economy is expected to grow. In 2022, the country's inflation rate increased to 5.5%, but it is expected to decrease to a more moderate rate in 2023, at around 4%, and 2024, when it is expected to reach 3%. Although Libya continued implementing economic policy responses to mitigate the impact of the COVID-19 pandemic, the country still faced a civil war and a divided government.
Continued inflation and low oil production exacerbated poverty in a country already ravaged by civil war and repeated terrorist attacks. The Tripoli government has implemented an active policy of job creation, especially in the public sector, but, according to Ministry of Labor, unemployment rate reaches 20%, and about half of all young people and a quarter of women remain without employment.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 46.90 | 39.01 | 44.07 | 46.30 | 48.32 |
| GDP (Constant Prices, Annual % Change) | -29.5 | 28.3 | -12.8 | 17.5 | 8.4 |
| GDP per Capita (USD) | 7,059 | 5,813 | 6,502 | 6,764 | 6,989 |
| General Government Gross Debt (in % of GDP) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Inflation Rate (%) | 1.5 | 2.9 | 4.5 | 3.4 | 2.9 |
| Current Account (billions USD) | -3.97 | 2.86 | 1.17 | 5.57 | 6.68 |
| Current Account (in % of GDP) | -8.5 | 7.3 | 2.7 | 12.0 | 13.8 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Libya's 6.5 million population includes a work force of 2.5 million. Agriculture's share in Libya's economy is negligible, accounting for 4.1% of GDP and employing 16.4% of the workforce (World Bank). Main products include wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans, and cattle. Arid climate conditions and the poor quality of the soil severely limit agricultural production.
Industry is the backbone of the Libyan economy because of the strong petrochemical industry. It accounts for 48.3% of GDP, employing 24.4% of the active population (World Bank). Production includes petroleum, petrochemicals, aluminium, iron, steel, food processing, textiles, handicrafts, and cement. Although the Libyan petrochemical industry, especially the country's petroleum exports, were negatively impacted by the pandemic and the drop of oil prices, the sector showed signs of recovery in 2022.
Services account for 55.8% of GDP and its share in total employment stands at 59.2% (World Bank). Although this is the second largest sector in Libya, significant industries, such as tourism and retail, are significantly underdeveloped. Financial services and transportation, however, account for a significant part of the service sector. Even though the impacts of the pandemic were felt through the service sector, it wasn't as significantly hit as industry.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 16.4 | 24.4 | 59.2 |
| Value Added (in % of GDP) | 4.1 | 48.3 | 55.8 |
| Value Added (Annual % Change) | 20.2 | -10.6 | -15.1 |
Source: World Bank - Latest available data.
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| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Lybian Dinar (LYD) - Average Annual Exchange Rate For 1 MUR | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 |
Source: World Bank - Latest available data.
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The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
See the country risk analysis provided by Coface.
Trade has been an important element of the Libyan economy since early 2000s, peaking at 139% of GDP in 2014, before the country mired into another civil war. Nevertheless, its share recovered slightly in the last few years and, according to the latest available data, it reached 114.1% in 2020 (World Bank). Main exports included crude oil, refined petroleum products and natural gas (94% of total exports, UNCTAD), as well as gold, iron, and copper. Significant items of import include refined petroleum, automobiles, transmission apparatus for radio-telephony, rolled tobacco, and medicaments.
Libya is an active member of the AMU (Arab Maghreb Union), and the country's main suppliers are China (16.2%), Turkey (13.7%), Italy (9.1%), the United Arab Emirates (8.9%), and Egypt (5.48%). As for Libya's top export partners, they include Italy (18.1%), China (16%), Germany (15%), Spain (14.6%), and the United Arab Emirates (5.7%).
Libya's economic growth was suspended in 2011 due to the eruption of the civil war. The conflict halted commercial activities, especially exports of oil. In addition, economic and trade sanctions imposed by Western countries before the fall of Colonel Gaddafi significantly hampered trade. According to the last available data from WTO, Libya's imports of good and services decreased by 27.8% in 2020, while exports recorded a decrease of 62.6%, mainly due to the negative impacts of the pandemic. In 2021, imports of goods stood at USD 18.9 billion and imports reached USD 28.9 billion, bringing the trade balance to a deficit of USD 10 billion.
| Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 11,357 | 13,786 | 16,543 | 13,396 | 18,972 |
| Exports of Goods (million USD) | 18,379 | 29,830 | 25,732 | 7,741 | 28,986 |
| Imports of Services (million USD) | 3,749 | 4,528 | 6,538 | 0 | 0 |
| Exports of Services (million USD) | 107 | 134 | 134 | 0 | 0 |
| Imports of Goods and Services (Annual % Change) | 27.4 | 23.8 | 1.4 | 2.9 | n/a |
| Exports of Goods and Services (Annual % Change) | 128.6 | 22.0 | -13.0 | -52.6 | n/a |
| Imports of Goods and Services (in % of GDP) | 20.4 | 24.2 | 35.4 | n/a | n/a |
| Exports of Goods and Services (in % of GDP) | 27.2 | 39.6 | 42.8 | n/a | n/a |
| Trade Balance (million USD) | 8,308 | 16,044 | 11,332 | 164 | n/a |
| Trade Balance (Including Service) (million USD) | 3,857 | 11,115 | 3,958 | -4,797 | n/a |
| Foreign Trade (in % of GDP) | 47.5 | 63.8 | 78.2 | n/a | n/a |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
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| 0.1 bn USD of services exported in 2018 | |
|---|---|
| 41.51% | |
| 38.59% | |
| 19.90% | |
| 5.1 bn USD of services imported in 2018 | |
|---|---|
| 40.33% | |
| Personal travelPersonal travel | 40.33% |
| 25.63% | |
| 22.86% | |
| 10.57% | |
| 0.62% | |
Source: United Nations Statistics Division, Latest Available Data
Since the civil war and the political change that followed, the UN recognised the Libyan Transitional National Council (TNC) as the legitimate governing authority for Libya until an interim government is in place. The TNC was followed by the Government of National Accord (GNA), which has faced competition from Tobruk-based Libyan National Army (LNA), despite having been recognised by the UN as the legitimate ruling body. In March 2021, the House of Representatives, previously loyal to the LNA, approved the formation of a Government of National Unity, which has the task of unifying two rival forces.
The High Council of State acts as an advisory body aiming to reunite the Tripoli-based government with Tobruk-based House of Representatives. The Council is able to advise both the interim Government of National Accord (GNA) and the House of Representatives (HoR), and its 145 members were appointed by remaining members of its predecessor, the Libyan General National Congress.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: May 2023
