Libya’s economy set to stabilise – World Bank

Libya’s economy is set to stabilise following an agreement that resolved the leadership crisis at the Central Bank of Libya (CBL), spurring a recovery in oil production, the World Bank reported on Wednesday.

However, the World Bank forecasts a 2.7 per cent contraction in GDP for 2024, with growth contingent on political stability and economic diversification beyond hydrocarbons.

Oil output, which had dropped by 8.5 per cent earlier in the year due to the crisis, rebounded to 1.3 million barrels per day (Mbpd) by October, while oil prices remained around $80 per barrel.

The report highlights the toll of instability over the past decade, with $600 billion in economic losses and a GDP that could have been 74 per cent higher without conflict. Key challenges include reliance on oil, low productivity, and declining quality in health and education.

Looking ahead, oil production is expected to increase to 1.3 Mbpd by 2026, driving GDP growth to 9.6 per cent in 2025 and 8.4 per cent in 2026. Non-oil GDP growth is forecast at 1.8 per cent in 2024, with higher growth anticipated in 2025-2026. Despite lower oil revenues in 2024, fiscal and external balances are projected to remain positive.

To foster long-term prosperity, Libya must prioritise stability, improve governance, and develop non-oil sectors to create high-value jobs and improve citizens’ quality of life.

Attribution: World Bank

Subediting: M. S. Salama