A new analysis released by ORF Middle East warns that Libya’s apparent financial improvement in 2025 is largely cosmetic, describing the country’s economy as a “zombie system” that appears active on the surface but remains structurally weak and dangerously unstable.
The report argued that positive economic indicators have created an illusion of recovery that does not reflect conditions on the ground.
ORF noted that headline figures, such as GDP growth surpassing 15 percent and oil production stabilizing at 1.3 million barrels per day, suggest an economy gaining momentum. However, the report stresses that neither indicator points to genuine resilience.
Libya remains almost entirely dependent on oil revenues, with the non-oil sector stagnant and unable to support long-term development or job creation. Despite the supposed improvements, liquidity shortages continue to plague the banking sector, where citizens still wait in long lines for limited cash withdrawals.
One of the most critical threats highlighted in the report is the widespread circulation of counterfeit currency. Analysts believe large volumes of forged banknotes have entered the Libyan market over recent years, creating what ORF describes as a “shadow currency” that undermines the Central Bank’s ability to control inflation, regulate liquidity, or stabilize the dinar.
This issue persists despite changes in bank leadership and the recent reduction of the foreign currency purchase fee.
The report also examines how Libya’s ongoing political fragmentation has disrupted financial governance.
With rival authorities operating across the country, the Central Bank has been forced to act as a substitute Ministry of Finance, funding public expenditure, printing money, and handling fiscal decisions in the absence of unified state institutions.
ORF argued that this has produced a deceptive “accounting recovery,” where financial indicators improve only because the value of the Libyan dinar has declined rather than due to real economic expansion.
ORF concluded that Libya’s economic recovery is largely a statistical illusion driven solely by oil sales and exchange-rate distortions.
