Oil boost prompts IMF to revise Libya’s 2025 growth forecast

The International Monetary Fund (IMF) has adjusted its growth projections for Libya’s economy, citing a recovery in oil production as a key factor in the nation’s economic outlook.

In its latest assessment following a delegation visit to Libya, the IMF forecasts an uptick in GDP growth for 2025, whilst noting that 2024 is likely to see a decline in both GDP growth and external balance. The medium-term outlook remains relatively stable, according to the report.

The Fund, however, cautioned that these projections face potential downside risks, particularly from lower-than-anticipated oil prices and possible political instability, which could constrain fiscal flexibility.

The Fund emphasised that such a budget would help prevent pro-cyclical spending patterns and enhance resource management.

The IMF endorsed the Central Bank of Libya’s initiatives to improve foreign exchange access and address local currency shortages through increased banking system liquidity and expanded electronic payment services.

In terms of structural reforms, the Fund highlighted the necessity for comprehensive governance review across public sector institutions. It particularly commended progress in strengthening banking sector oversight, specifically in anti-money laundering measures, terrorist financing prevention, and financial technology innovation.

The international body has pledged continued support through capacity-building programmes, focusing on various areas including tax policy, budget preparation, revenue management, consumer price indices, reserve management, and monetary policy implementation.

Speaking about fiscal policy, the Fund maintained that controlled spending remains the optimal approach within Libya’s current macroeconomic framework.