IMF: Oil, stablity threaten Libyan economy

May 24, 2013 at 8:11 AM

WASHINGTON, May 24 (UPI) -- The Libyan economy is vulnerable to fluctuations in oil prices as well as security and political challenges, the International Monetary Fund said.

The IMF reports that Libya's economy collapsed during the 2011 war, with gross domestic product falling more than 60 percent. Libyan oil production during the war stopped and the IMF said the lack of exports led to a budget deficit of 15.4 percent of GDP.

"The restoration of hydrocarbon production underpinned growth of 104.5 percent in 2012 while inflation declined to 6.1 percent," the IMF said. 'The budget had a surplus of 20.8 percent of GDP and the current account surplus widened to 35.9 percent of GDP."

The IMF said it welcomed the economic recovery in Libya as it charted its post-war course. IMF directors said the economy had a "pronounced vulnerability to oil price fluctuations," however. It added further concerns that Islamic laws forbidding interest in financial transactions could limit economic development.

The IMF reports that the Libyan energy sector represents about $63 billion to the government, a majority in terms of GDP percentage.

The Organization of Petroleum Exporting Countries reports that Libya produced 1.51 million barrels of oil per day in April, near its pre-war level of 1.65 million bpd.

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