The International Monetary Fund (IMF) disclosed that Libya’s foreign reserves amounted to $82 billion at the end of 2022. Dmitri Gershenson, the Head of the IMF mission to Libya, noted in an interview with CNBC Arabia that the frozen assets have totaled $70 billion since 2011.
Gershenson lauded the role of the Central Bank of Libya (CBL) in preserving these reserves despite the ongoing turmoil, thus providing a cushion against economic shocks for the Libyan economy. He also brought to light the economic contraction Libya experienced in 2022, with its Gross Domestic Product (GDP) shrinking by 11%.
However, the IMF mission head holds a more positive outlook for 2023. He projected a 19% growth in Libya’s local economy for the upcoming year, suggesting potential economic recovery amidst the ongoing geopolitical and financial challenges.
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In March, the IMF mission held discussions for the 2023 Article IV consultation for Libya in Tunisia.
In a statement at the conclusion of the mission’s talks, the IMF welcomed the opportunity to reengage with Libya via an Article IV consultation, after a decade-long hiatus.
It added that the fragmentation of the country that followed the fall of the Gaddafi regime in 2011 “effectively suspended the production of key economic indicators and complicated policymaking, resulting in difficulties in conducting consultations.”
“The Libyan authorities have recently made commendable progress towards improving data collection, sharing, and transparency. Together with the flexibility afforded by the IMF’s new Fragile and Conflict-Affected States (FCS) strategy, this has paved the way for a resumption of Article IV consultations,” according to the statement.
It noted that Libya’s “institutional framework has helped the country through a period of significant macroeconomic volatility and turmoil.”
The IMF explained that “there have been exceptional swings in Libya’s oil production and revenues since 2011. Despite this, the measures taken by the CBL, including the currency’s devaluation, helped maintain a large stock of international reserves. Looking ahead, the stability of the exchange rate will remain an important anchor for monetary policy.”
