Libya’s economy grew by 3.8 per cent in 2008, according to an International Monetary Fund (IMF) annual report on the North African country.

The IMF estimates that non-oil gross domestic product (GDP) grew by 8 per cent and inflation reached 10 per cent as a result of higher international commodity prices and an increase in public spending.

The country’s budget surplus was 25 per cent of GDP as revenues climbed 37 per cent, following higher oil prices and better tax collection.

The current account surplus was 41 per cent of GDP.

The IMF forecasts that economic growth will decelerate to 2 per cent in 2009 as a result of an expected 1.5 per cent drop in oil production. It expects non-oil growth to slow to 6 per cent.

According to the IMF, the country’s budget surplus will fall to 10 per cent of GDP while the current account surplus will contract to 17 per cent of GDP. Oil exports are projected to fall by 40 per cent.