Libya’s economy recorded a strong rebound during the first nine months of 2025, driven primarily by the recovery and expansion of the oil sector, according to the latest World Bank Libya Economic Monitor. Real GDP is projected to grow by 13.3 percent in 2025, supported by a 17.4 percent increase in oil sector activity, while non-oil GDP is expected to expand by 6.8 percent amid resilient private and public consumption. Oil production averaged 1.3 million barrels per day, up from 1.1 million barrels per day in 2024, reflecting improved security conditions, increased investment, and continued maintenance of oil projects following earlier disruptions linked to the Central Bank leadership dispute. Despite this positive momentum, Libya continues to face deep-rooted structural, political, and security challenges that constrain its long-term economic outlook.
Public finances also showed notable improvement, with the Government of National Unity posting a fiscal surplus equivalent to 3.6 percent of GDP in the first nine months of 2025, compared to 0.7 percent during the same period in the previous year. This performance was achieved despite weaker global oil prices, as hydrocarbon revenues rose by 33 percent due to higher production levels and the April 2024 devaluation of the Libyan dinar, which helped offset declines in tax revenues.
While the short-term outlook remains broadly positive provided security conditions hold, the report cautions that domestic political tensions and institutional fragmentation continue to complicate macro-fiscal management and policy consistency. Sustaining recent gains will depend on advancing reforms that enhance transparency, accountability, and the effectiveness of public service delivery.
A special focus of the report examines Libya’s public financial management system, identifying institutional fragmentation, parallel budget processes, and heavy dependence on oil revenues as key weaknesses undermining fiscal discipline and service provision. The analysis finds that Libya lags behind other fragile and conflict-affected countries in budget preparation, execution, and reporting, leaving public finances vulnerable to shocks. Drawing on international experience, the report underscores that targeted reforms remain feasible and impactful, recommending measures such as establishing a Treasury Single Account, improving cash management, and revising budget classification systems to strengthen transparency and fiscal control.
