Libya Economic Forecast

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Forecasting Libya’s economy has in past years been fairly straightforward, since its economy is dominated by oil. Oil contributes 95% of export revenues, 25% of GDP, and 80% of government income.

The 2011 Libyan uprising and resulting civil war have changed things significantly, however.


Forecasting Libya’s economy has in past years been fairly straightforward, since its economy is dominated by oil. Oil contributes 95% of export revenues, 25% of GDP, and 80% of government income.

The 2011 Libyan uprising and resulting civil war have changed things significantly, however.

The first month of fighting led to two thirds of oil production being lost. Libya is the 17th largest oil exporter in the world, and the 3rd largest producer in Africa. Even after fighting ends, it could take years to restore full production, as facilities have been bombed and foreign oil industry workers have mostly fled the coutnry.

Libya exports about 1.9% of world needs, or around 1.6 million barrels per day, but that dropped to 500,000 barrels during this period. 85% of exports go to Europe, and Libya is Italy’s largest oil provider, and also supplies 10% of its gas through the Greenstream pipeline.

The ruthless way in which Gaddafi has cracked down on protesters with his airfore, tanks and foreign mercenaries has also led to tight sanctions being imposed on the country, which will further dampen economic growth.

Libya GDP Forecast

Libya’s GDP (on a Purchasing Power Parity basis) was US$96.099 billion in 2010, making Libya the 69th largest economy in the world.

GDP growth hit 10.637% in 2010 following a 2.3% contraction in 2009, and the pre-uprising forecast had been for 6% – 8% growth over the next five years.

It is now more likely that there will be an economic contraction this year, before the country experiences a rebound and possibly faster growth later in the five year period.

Libya Unemployment Forecast

Libya had a population of 6.459 million in 2010, expected to rise at a 2% rate to 6.587 million in 2011 and 7.126 million in 2015.

It is one of the richest countries in Africa, with a GDP per capita of US$14,878.24 in 2010.

However most of this wealth does not reach the general population, and this was one of the key causes of the uprising, together with a reaction to the repressive policies of the regime.

The unemployment rate has been as high as 30% in recent years. With the current fighting closing down many industries, this figure is likely to be effectively above 50% in 2011, but reconstruction efforts after the fighting ends means that it could also substantially drop.

The outlook is very uncertain for unemployment, as it is for the Libyan economy in general.

Libya Inflation Rate Forecast

Libyan inflation hit 4.5% in 2010, and with sanctions now in effect there is likely to be a scarcity of key items, meaning that inflation is likely to go into double digits.

Libya Current Account Balance Forecast

Libya enjoys a current account surplus of US$15.688 billion in 2010 thanks to oil exports. The pre-crisis forecast was for this to rise continously, to $31.13 billion by 2015.

Current conditions mean this figure could drop in the short term before rising again once oil output is restored.

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The free-spirited family-man internet entrepreneur who fell in love with the study of economics. And congas.