Dmitry Gershenson, head of the IMF team overseeing economic and financial developments in Libya, stated in a Monday release that the recent reunification of Libya’s Central Bank is a positive step. He added that Libya’s economic expectations in the medium term remain positive, given the anticipated increase in global oil prices.
Gershenson noted in the statement that the destructive floods in eastern Libya are not expected to have a significant impact on the country’s Gross Domestic Product (GDP), as the Libyan economy heavily relies on oil and gas production. He affirmed that Libya’s economic prospects in the medium term remain positive due to the expected rise in global oil prices.
He added that in the short term, Libya needs a budget to support policy credibility because untargeted financial spending complicates the implementation of macroeconomic policies. In the medium term, the country needs an economic strategy to diversify away from oil and gas, promoting stronger and more inclusive growth led by the private sector.
Reducing untargeted subsidy support, he explained, would free up resources for better social spending and productive investments in the short term. In the long term, reform efforts should focus on strengthening institutions, updating the anti-money laundering and counter-terrorism financing framework, and addressing concerns about corruption and governance.
The statement emphasized that the reunification of Libya’s Central Bank is a step in the right direction, improving coordination in monetary policy, banking system liquidity, and oversight. It stressed the importance of the next steps, including integrating the payment system, unifying the organizational structure of the central bank, and implementing accounting procedures before achieving full reunification.
The IMF expert team praised the reforms carried out by Libyan authorities this year, noting significant progress in improving data collection, enhancing the anti-money laundering and counter-terrorism financing framework, innovation in financial technology, and aligning banking supervision with international standards.
A team from the International Monetary Fund participated in preparatory meetings held last week in Tunisia with officials from the Central Bank of Libya, leading up to Article IV consultations with the International Monetary Fund scheduled for April. The consultations will involve experts from the Fund, the Libyan Audit Bureau, the National Oil Corporation, and representatives from the ministries of finance, planning, labor, statistics, and census.