The International Monetary Fund (IMF) has noted that while Libya’s economy continues to recover, it remains highly vulnerable to significant risks, primarily driven by political volatility and an overwhelming reliance on the hydrocarbon sector.
In its concluding statement for the 2026 Article IV consultation, the IMF highlighted that persistent institutional divisions and escalating levels of unregulated public expenditure are major hurdles to achieving long-term financial stability. The report underscored that high deficits continue to exert downward pressure on the exchange rate and deplete international reserves.
The Fund warned that any internal or external shocks would have an immediate impact on the country’s monetary reserves and overall fiscal health. Consequently, it emphasized the urgent need for more disciplined economic policies to ensure fiscal sustainability.