Economic and Political Overview

flag Libya 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

 

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Libya's economy is almost entirely dependent on oil and gas exports. In 2021, the country made significant progress towards institutional, political, economic, financial and military reunification in 2021, which resulted in a strong rebound of oil production. As such, the GDP grew by an estimated 123.2% of GDP in 2021, amid a strong recovery in oil prices and domestic oil output. That staggering growth, however, is expected to slow down and give way to a more moderate growth rate of 5.3% in 2022 and 5.5% in 2023.

Libyan oil and gas production accounts for nearly 60% of aggregate economic output and more than 90% of fiscal and export revenues. In 2021, oil activity in the country resumed, following the 2020 blockade on oilfields imposed by  military commander Khalifa Haftar, which were lifted in December of that same year. With that, a notable recovery was recorded both in the oil sector and the country's oil-dependent economy, with the current account going from a deficit of USD 2.35 billion in 2020 to a surplus of USD 5.25 billion in 2021. However, the country's inflation rate significantly increased over the same period, reaching 21.1% in 2021. Nevertheless, inflation should decrease to a more moderate rate in 2022, at around 8%, and 2023, when it is expected to reach 6.5%. Although Libya continued implementing policy responses to mitigate the impact of the COVID-19 pandemic in 2021, 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 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 39.50e19.21e27.3029.2029.99
GDP (Constant Prices, Annual % Change) 13.2e-59.7e123.25.35.5
GDP per Capita (USD) 6,0042,891e4,0694,3094,382
General Government Gross Debt (in % of GDP) 0.00.00.00.00.0
Inflation Rate (%) 0.22.83.73.72.4
Current Account (billions USD) 0.43-2.355.254.494.47
Current Account (in % of GDP) 1.1e-12.219.215.414.9

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Main Sectors of Industry

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 1.8% 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 77.5% 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 2021.

Services account for 20.7% of GDP and its share in total employment stands at 59.1% (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 both in 2020 and 2021, the sector 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) 1.8 77.5 n/a

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Lybian Dinar (LYD) - Average Annual Exchange Rate For 1 MUR 0.040.040.040.040.04

Source: World Bank - Latest available data.

 
 

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Business environment ranking

Definition:

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.

Score:
3.44/10
World Rank:
81/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

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 reaches 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 2020, imports of goods stood at USD 13.3 billion and imports reached USD 7.7 billion, bringing the trade balance to a deficit of USD 5.5 billion.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 10,60011,35713,78616,54313,396
Exports of Goods (million USD) 6,00018,37929,83025,7327,741
Imports of Services (million USD) n/a3,7494,5286,5380
Exports of Services (million USD) n/a1071341340
Imports of Goods and Services (Annual % Change) -41.627.423.844.2-27.8
Exports of Goods and Services (Annual % Change) -27.0128.622.017.3-62.6
Imports of Goods and Services (in % of GDP) 44.139.835.853.180.2
Exports of Goods and Services (in % of GDP) 26.149.956.964.433.9
Trade Balance (million USD) -1,9038,30816,044n/an/a
Trade Balance (Including Service) (million USD) -4,7003,85711,115n/an/a
Foreign Trade (in % of GDP) 70.289.792.8117.5114.1

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 
 
 
 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Political Outline

Current Political Leaders
Chairman of the Presidential Council: Mohamed al-Menfi (since 15 March 2021)
Prime Minister: Abdul Hamid Dbeibeh (since 15 March 2021)
Next Election Dates
The country's legislative elections were scheduled to be held on 21 December 2021. However, on that day, the head of High National Election Commission (HNEC) ordered the dissolution of the electoral committees nationwide, which led to the indefinite postponement of the elections.
Parliamentary elections are scheduled to be held in 2022.
Main Political Parties
Libya's Government of National Accord (GNA) was formed as an interim institution in the aftermath of the civil war. GNA 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 largest political forces in the country include:
- National Forces Alliance (NFA): liberal, moderate coalition comprising of at least 58 parties, holds almost half of parliamentary seats
- Justice and Construction Party (JCP): right-wing, abstains from government, large Muslim Brotherhood faction, Islamist, can no longer operate openly
- National Front Party: liberal, progressive
- Union for Homeland: centre, localist, populist
- National Centrist Party: centre, nationalist, Islamic democracy, Islamic liberalism
- Homeland Party: conservative, Islamic democracy

Other blocs include: Ya Biladi, Voice of Libyan Women and the Salafis.

Type of State
Republic (in transition).
Executive Power
Previously, the Libyan regime and, in particular, its political and economic system, was based on the Green Book, founding work of Colonel Gaddafi, who saw in this book a third universal theory of synthesis between liberalism and Marxism.

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.

Legislative Power
Previously, the legislature was unicameral in Libya. The parliament consisted of the General People's Congress (GPC). Its members were elected representatives (called secretaries) of around 600 local bodies called ‘basic popular congresses', and served a term of four years.

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.

 

Indicator of Freedom of the Press

Definition:

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.).

World Rank:
165/180
 

Indicator of Political Freedom

Definition:

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.

Ranking:
Not Free
Political Freedom:
7/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Libya, you can visit the report produced by OCHA Libya in collaboration with WHO Libya.  
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To discover the public health situation in Libya and the current sanitary measures in vigour, please consult the latest situation report available here.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of the Libyan Ministry of Economy that issued for instance a decree banning the export of medical masks and sterilization materials.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Libya on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
Most of the economic measures taken by the Libyan government to address the impact of the COVID-19 pandemic on the national economy are addressed in the Libya Humanitarian Response Plan Prioritization: Direct and Indirect Contribution to COVID-19 Response (April-June 2020). In addition, you can consult the Impact of COVID-19 prevention measures on humanitarian operations for Health Sector in Libya are specified in this WHO´s report.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Libyan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Libya in the IMF’s Policy Tracker platform.
Support plan for businesses
The country's government official sources do not provide yet information with regards to specific schemes in support of business or exporting companies following the coronavirus epidemic outbreak. Some measure to support private sector can be found here. For the updated information please visit the website of the Libyan Ministry of Economy.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
The country's government official sources do not provide yet information with regards to specific schemes in support of business or exporting companies following the coronavirus epidemic outbreak.  For the updated information please visit the website of the Libyan Ministry of Economy.
 

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Latest Update: October 2022