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Libya Country Risk Report Q4 2018

Libya Country Risk Report Q4 2018

Field Marshal Khalifa Haftar's July handover of oil facilities to the internationally recognised National Oil Corporation may help de-escalate political tensions in Libya in the short term. However, a lasting solution to the wider conflict still appears far off, as rival eastern and western factions remain unwilling to compromise in negotiations over power-sharing.

Oil export gains will continue to support growth in economic activity in Libya over 2018-2019, albeit to a much lesser extent than in 2017, given production disruptions and waning base effects. Consumption and investment will remain subdued, weighed down by currency weakness and elevated inflation.

Higher oil revenue will facilitate a narrowing of Libya's fiscal deficit – but only moderately so, as oil production suffers from frequent disruptions, and as current spending remains high. Persistent deficits will primarily be funded through domestic borrowing, causing already-high public debt levels to increase further.

Key Risks



Libya's combination of oil wealth, tribal divisions, weak-to-non-existent institutions and a security vacuum portend to significant instability and potential for a return to full-blown civil war over the coming years.

A failure to create sufficient employment opportunities within the non-oil economy poses a clear risk to social stability given Libya's burgeoning youth population.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Libyan Growth To Slow In 2018 On Oil Production Outages
Fiscal Policy And Public Debt Outlook
10-Year Forecast
The Libyan Economy To 2027
Protracted Crisis As Political Instability Is Elevated
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Oil Port Handover No Gamechanger For Libyan Conflict
Long-Term Political Outlook
Fragile Federalised State To Emerge
Libya Country Risk Q4 2018ContentsGlobal Macro Outlook
Fewer Negative Surprises, But Trade Risks Rising
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: LIBYA – MACROECONOMIC DATA AND FORECASTS

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