World Bank: Libyan Income Reduced to Half

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The World Bank said that the armed conflict has exhausted the Libyan economy, with estimates of GDP per capita in 2021 about half its value in 2010, before the conflict began.

The World Bank stated that since 2020, Libya has been exposed to multiple waves of the COVID-19 pandemic. Despite the great efforts made, the healthcare system, which was already exhausted due to a decade of conflict, faced great challenges in providing sufficient quality care.

It stated that food security worsened due to the Russian-Ukrainian war. This resulted in a shortage of basic foodstuffs, and an increase in their prices in the local market.

The oil sector went through major fluctuations during 2022. Production declined during the first quarter of 2022 to a level 4.4% lower than the average of 2021. It indicated that the inflation rate in 2022 recorded a gradual increase, reaching 5.7% in March, compared to 2021.

It noted that by May 2022, the minimum expenditure basket inflation rate was 32.2% higher than it was in May 2021, and 49.5% more than it was in March 2020 with the onset of the pandemic.

The World Bank revealed that the prices of basic commodities, food and beverages, housing, electricity, water, gas and other types of fuel and transportation, are the main contributor to the rise in the official inflation rate in Libya since 2021.

The bank indicated that the rise in these commodities contributed to disruptions in supply chains due to the internal conflict, health measures related to the pandemic, and the reliance on costly alternative sources of water supply and electricity generation to increase prices.

The food inflation rate in the minimum expenditure basket rose to 40.6% on an annual basis in April 2022, before declining to 31% in May 2022, a rate that is still high.

According to the World Bank, the average cost of food in the minimum expenditure basket in May 2022 was 14% higher than it was before the crisis in February 2022.

The cheapest brand of flour recorded an increase in its prices by 17% in May 2022, compared to February 2022. Prices of couscous and bread in May 2022 recorded an increase of 80%.

The World Bank said that translating these figures leads to a rise in the rate of inflation and a decrease in consumption. This could exacerbate poverty and hunger experienced by low-income and poor families.