Abstract
Libya has experienced significant growth and development in recent years. The
country had remained in
isolation after UN sanctions were imposed in 1992.
After more than a decade, in 2003, the sanctions were
finally lifted, and
Libya has since made important steps forward. The removal of international
sanctions
has seen a steady increase in activity in the energy and
infrastructure industries. However, Libya’s
infrastructure sector
will not be able to avoid the adverse consequences of the current global
financial
crisis. In the BMI Libya Infrastructure Report 2009, we forecast
5.0% annual real growth for the
country’s construction, and by
extension infrastructure, sector in 2009, which marks an important
slowdown from the rate of 19.8% achieved only four years ago, in 2005.
The
opening of Libya’s market to international companies has played a key
role in the country’s
economic growth and the country has been able
to attract more foreign direct investment (FDI). This has
been mainly the
case in the country’s energy sector. The revival of the country’s
dormant energy sector at
a time of record oil prices brought unprecedented
windfalls to the country. The Libyan economy is
heavily dependent on
revenues from the oil sector. The sector contributes almost 30% of the
country’s
gross domestic product (GDP), which is one of the highest
per capita GDPs in the African continent.
What is more, in the past five
years, the Libyan government has made progress on economic reforms as
part
of a broader campaign to reintegrate the country in the international
community. However, Libya still
faces a long road ahead in liberalising
the socialist-oriented economy and combating corruption. Initial
steps in
that direction include applying for World Trade Organisation (WTO) membership,
reducing some
subsidies and announcing plans for privatisation.
Overall, Libya has achieved significant change since the lifting of sanctions
in 2003. Despite our concerns
about the extent of the negative impact of
external factors, such as the credit crunch and the steep fall in
oil
prices, our outlook for Libya remains positive. For 2009, we forecast real GDP
growth of 4.5%.
| 
View Cart
