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IMF forecasts economic growth in Libya in 2012

Jul 13, 2012

According to the International Monetary fund (IFM), Libyan economy is expected to show some recovery in 2012, concurrent with an improvement in the security situation. Crude oil production has exceeded 1 million barrels per day as of early 2012, and is expected to reach the pre-conflict level in 2014. Non-hydrocarbon GDP is expected to recover by 2014, driven mainly by reconstruction. Although the CPI increased significantly in 2011, consumer price inflation is expected to ease now that imports have resumed and the CBL is withdrawing domestic currency from the system by selling foreign exchange. The external current account surplus in 2012 will increase with the restoration of hydrocarbon and nonhydrocarbon

In the other hand, the report of the IFM underlined that the Libyan economy recovery is closely linked with an improvement of the security situation. In fact the report underlined that the uncertainties in the security environment would constrain the economic recovery of the private sector, and could impede the return of expatriate workers who are needed to alleviate workforce bottlenecks.

The report also emphasized the importance of certain reforms in the recovery of the Libyan economy underling the importance of the financial sector reform to improve the Libyan banking system performance.

In fact the IFM report described as crucial that Libya advance structural reforms to support private-sector growth, economic diversification, and the creation of employment for its young and growing labor force. Enhancing access to finance for entrepreneurs by developing the nascent financial sector will go a long way to create new employment opportunities and foster the growth of the non-hydrocarbon economy. Such measures need to go hand in hand with strengthening the education system and increasing human capital.
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