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The Arab Monetary Fund has forecast Libya’s economy to expand by 14.3% in 2025, before moderating to 5.9% the following year, contingent on improved domestic stability and stronger investor confidence.
In its latest Arab Economic Outlook report released this week, the Fund attributed the robust growth outlook to the hydrocarbons sector, which provides over 95% of state revenues, and to the National Oil Corporation’s achievement of raising daily output to more than 1.4 million barrels by the end of 2024.
While Libyan authorities have been implementing gradual reforms to enhance economic and social conditions, the report cautioned that weak institutional capacity and fragile stability continue to impede structural transformation.
Inflation in Libya has remained subdued, standing at 2.4% in 2023 and easing to 2.1% in 2024, a trend the Fund credited to the stable exchange rate of the Libyan dinar against the US dollar. Projections place inflation at 1.8% in 2025 and 1.9% in 2026.
Although the broader Arab region has seen improved economic conditions at the start of 2025, risks persist from global trade tensions, geopolitical uncertainties, and declining energy prices. The Fund noted that while new U.S. tariffs will likely have limited direct impact on Arab economies due to hydrocarbons exemptions, they could indirectly slow growth by affecting key trading partners.
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