Economic Analysis - High Growth On Oil Production Gains Mask Underlying Obstacles - FEB 2018

BMI View: Although oil production gains will boost growth in Libya over the coming quarters , a sustained economic recovery will remain off the cards until a lasting peace deal is reached and implemented on the ground . We maintain our view that the country's economy will not surpass its nominal 2012 levels for at least another six years .

The Libyan economy will register sharp growth over the quarters ahead - forecast to reach 17.7% in 2018, from a projected 32.1% in 2017 - on the back of rising oil production, and starting from a low base. The non-oil sector will remain in a state of crisis, however, amid elevated political instability, soaring inflation and currency weakness. Beyond 2018, growth will likely decelerate substantially, as the country struggles to bring in the foreign investment needed to further develop both the oil- and non-oil sectors, amid persistent security risks and numerous structural obstacles.

Oil Will Drive Exports

GDP To Remain Below Pre-Conflict Levels
Libya - Nominal GDP, USDbn
e/f = BMI estimate/forecast. Source: BMI, UN

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