Libya entered 2021 as a divided nation aspiring for recovery and healing. With intensifying conflict and a blockade of oil terminals and fields, the economy registered one of the worst performances in recent records for the most part of 2020. Starting in mid-September, a rapprochement between political/military factions brought much-needed relief to the economy, capping the GDP plunge at 31.3%, annually. The election of a unity government in early 2021 has rekindled hope, but the reunification agenda faces formidable challenges ahead.
Recent Developments
For the most part of 2020, the performance of the Libyan economy was the worst in recent records. Even with the rebounding oil proceeds in the last quarter, the economy could not recover its earlier losses, and registered a 31.3% real decrease in GDP. On average, oil production in 2020 is estimated at 405,000 barrels per day, roughly a third of actual output in 2019.
Outlook
With looming uncertainties, projecting future economic trends is a daunting task. However, With major maintenance problems still pending, oil production is projected to reach 1.1 million barrel per day (MBD) in 2021. This would lead to a rebound in real GDP growth, to 67% in 2021. In terms of level of GDP, the economy would still be 23% smaller than that in 2010, the year prior to the start of the conflict.