Libya's transition to elected institutions has been derailed by the establishment of rival governing bodies, and political instability is expected to persist throughout most of the forecast period. As a result, the possibility of a civil war and territorial disintegration cannot be discounted in light of the ongoing fighting between Islamist and secular tribal forces.
Real GDP growth is expected to increase from -5.2% in 2014 to 5.4% in 2015 as oil production rises in the eastern region. However, felling oil prices and poor consumer and business sentiment will see growth slow down in 2016-18, averaging 3.6% annually.
Subdued oil production, coupled with a rising import bill, will lead to a deterioration of the current-account balance, which will record a deficit of 8.3% of GDP in 2014. Assuming security improves, the deficit should moderate to an annual average of around 2.2% of GDP in 2015-16, supported by rising oil production. However, felling oil prices will thereafter lead to a rising deficit, averaging 3.3% of GDP in 2017-18.

ML 5

Country forecast overview 6

Highlights 6

Business environment rankings 7

Fact sheet 8

Outlook for 2014-18 9

Political outlook 9

Economic policy outlook 10

Economic forecast 12

Data summary 14

Data sources and definitions 19

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