Non-oil growth praised

13 April 2006
The economy expanded by about 3.5 per cent in 2005, according to the conclusions of the IMF's latest Article IV consultations, released on 10 April. Encouragingly for the government's diversification efforts, growth in the non-oil sector was strongest, at about 4.5 per cent, largely due to expansionary fiscal policy.

The star performers in the non-oil sector were the trade, hotels and transportation sector, which grew by 7 per cent, followed by the construction and services sector, at 5 per cent. The manufacturing sector expanded for the first time in 5 years, by 1.8 per cent. Both government finances and the current account registered hefty surpluses on the back of high oil prices, respectively at 32.5 per cent and 41 per cent of gross domestic product (GDP).

Tripoli was predictably urged to accelerate economic reform but was credited for recent progress: the IMF praised the easing of trade restrictions, simplification of investment procedures and privatisation of state-owned enterprises, including Sahara Bank. A new banking law reinforcing the independence of the Central Bank of Libya and granting it the authority to license foreign banks was also welcomed.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.