Economic trends
Libya is taking advantage of a high economic growth with more than 5% between 2003 and 2007. Thanks to the high price of oil and the wealth of its reserves, exports of hydrocarbons have allowed the Libyan economy to advance very fast (the oil sector represents 30% of GDP). Another beneficial factor for Libyan growth has been the lifting of trade sanctions against the country by the United States and the European Union. Since 2003, Libyan growth has risen strongly through increased involvement in international trade, over and above the tension on the energy markets. This growth has allowed a constant rise in Libya's standard of living since 2000 and it has become one of the richest countries in Africa. Its GDP/inhabitant has reached 10,020 USD in 2007.
The growth of the non-petroleum sector continues (7.5% of GDP in 2007) thanks to the government's policy since 2003 which, with the advice of the IMF along with the future view of joining the WTO, encourages the liberalization of the economy and the partial privatization of the Libyan public sector. Thanks to the income from the oil sector, the government has been able to undertake a vast public investment scheme in infrastructures (telecommunications, roads, ports, health...).
Concerning hydrocarbons, the government continues its policy of allocating exploration fields by public auction and intends to raise production from 1.7 million barrels a day in 2006 to 3 million barrels a day in 2012. On the other hand, the Libyan economy is finding it difficult to diversify since FDI concerns mainly the petroleum sector and inflation continues to rise, reaching 10% in 2008.
The financial crisis and the drop in oil prices have caused a slight slowdown in Libya's economy. However, the country's economic perspectives remain very positive, due to the country's high potential of oil and gas resources which remain still unexploited.
Main branches of industry
Libya's main income resource is oil. Holding 40% of the African oil reserves and 3% of the world's reserves, the country is the second largest exporter of "black gold" in Africa. Oil alone represents one fourth of GDP. The construction sector is booming (20% of GDP), on a private level as well as large public infrastructures. The other main industries of the country are food processing, textiles, handicrafts and cement.
Agriculture is the second largest sector in Libya's economy. The country produces wheat, barley, olives, dates, citrus fruits, vegetables, peanuts, soya and livestock. However, the arid climate conditions and the poor quality of the soil limits the production severely. The recent growth in population has caused a considerable rise in food consumption. Therefore, 75% of the food consumed in Libya has to be imported.
International trade
Libya profits from the lifting of the US and European trade embargo and slowly comes back to the international trade scene.
In terms of cooperation, Libya is an active member of the AMU (Arab Maghreb Union) and it has also applied to become a member of the WTO.
The three major import partners of Libya are: Italy, Germany and Japan. The commodities mainly imported are iron and steel, industrial machines, vehicles, cereals, as well as other food products. The EU is Libya’s largest trade partner. In 1995 the "Barcelona Process" has been launched to create a free-trade area between the Mediterranean zone and the European Union.
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