Economic trends
The extreme political instability, the collapse of oil production and the freezing of Libyan foreign assets in the wake of UN sanctions have ended a relatively high economic growth in recent years (10% in 2010). 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 which allowed a large increase of Libyan economic growth and improved living standards of the population. Indeed, Libya has become one of the richest countries in Africa. Its per capita GDP has reached USD 10,000.
The growth of the non-petroleum sector has continued (7.5% of GDP), thanks to the government's policy, which, with the advice of the IMF and with the view of joining the WTO in the future, has since 2003 been encouraging 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...). The authorities have also encouraged the development of the private sector, in order to create employment and reduce subsidies. On the other hand, the Libyan economy is still finding it difficult to diversify and inflation is high: almost 5% in 2010. The country also suffers from administrative delays and a relatively high level of corruptions.
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, soy and livestock. However, the arid climate conditions and the poor quality of the soil limit 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 has benefited from the lifting of the US and European trade embargoes and is now slowly coming back onto the international trade scene. However, the conflict that erupted in the country halted exports, including oil. In addition, economic and trade sanctions imposed by Western countries to Libya have significantly hampered trade.
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 Lybian export basket is not at all diversified, since 95% of its exports are connected to the oil industry.
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. It should be noted that 75% of domestically consumed products are imported. 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.
© Export Entreprises SA, all rights reserved.
Last updates:
