Country Economic Forecasts > Libya

Until the planned Government of National Accord can be established, it is unlikely that the stability needed to coordinate an offensive against IS militants, who have been targeting vital oil infrastructure, will be successful and so oil production may remain at current lows in the near term. But we expect some progress on the political front, so oil output could rise this year and, despite our forecast of a low oil price, this could result in GDP growth of around 2% in 2016 after three consecutive years of major contraction. With the current account deficit seen rising to almost US$20bn, or close to 50% of GDP, this year, the government will again need to draw down its foreign reserves (which are falling quite sharply but remain substantial for now) to cover the revenue shortfall. Beyond the short term, the outlook hinges crucially on the two rival governments agreeing on a way forward from the impasse that has crippled the country in recent years.