Arab Monetary Fund sees 14.3% growth for Libya in 2025

Libya’s economy is expected to post one of the fastest growth rates in the region this year, expanding by 14.3 percent, according to the Arab Monetary Fund’s Arab Economic Outlook report released this week.

Growth is forecast to slow to 5.9 percent in 2026. The Fund said the outlook depends heavily on improvements in security, governance and investor confidence.

The report highlighted Libya’s heavy reliance on the oil and gas sector, which generates more than 95 percent of state revenues. It said the strong near-term growth projection reflects the National Oil Corporation’s achievement in raising daily crude output to more than 1.4 million barrels by the end of 2024.

Libyan authorities have introduced gradual economic measures aimed at improving living standards and strengthening the economy. The Fund cautioned that political instability and weak institutional capacity remain major obstacles to deep and lasting reforms.

Inflation has stayed low by regional standards. It stood at 2.4 percent in 2023 and eased to around 2.1 percent last year. The Fund attributed this to the stable exchange rate of the Libyan dinar against the United States dollar, which has helped contain price pressures. Inflation is projected to dip to 1.8 percent in 2025 and rise slightly to 1.9 percent in 2026.

The Fund said economic conditions across the Arab world improved in early 2025 compared with recent years. However, it warned that the recovery remains vulnerable to global trade tensions, falling energy prices and regional geopolitical developments.

While new United States tariffs are not expected to directly affect Libya’s oil exports, the Fund said they could indirectly slow growth by weakening demand in key trading partner economies.