TRIPOLI, Oct 1 (KUNA) - The Libyan economy has been witnessing major transformations during 2025, bringing a series of profound changes in various sectors, oil, banking, financial reforms, agricultural development and free economic zones, indeed redefining Libya's position on regional and global trade map.
Despite deep-rooted challenges related to political instability and fragile institutions, promising signs of growth have emerged, along with reformist visions that offer a glimmer of hope on a difficult path toward sustainable economic recovery.
The Arab Monetary Fund announced that the Libyan economy was expected to record a record growth rate of 14.3 percent in 2025, the highest among Arab economies in terms of growth pace, before slowing to 5.9 percent in 2026.
This growth is attributed to the hydrocarbon sector, which provides more than 95 percent of state revenues, making the economy directly hostage to fluctuations in global oil markets.
Despite these promising figures, the Fund warned that weak political stability and limited institutional capacity pose significant challenges to accelerating structural reforms.
The country witnessed relative stability in inflation, which stood at 2.4 percent in 2023, dropping to 2.1 percent in 2024, supported by the stable exchange rate of the Libyan dinar against the US dollar.
Benghazi and Derna saw accelerating paces of reconstruction and development over the past year, thanks to projects implemented by the Libya Reconstruction and Development Fund in cooperation with the National Development Agency. These efforts have revived the vital city, offering residents renewed hope for stability and growth.
Signs of recovery were gradually becoming visible in Benghazi's main streets and alleyways. The reconstruction program included: repair and reopening of main and secondary roads connecting neighborhoods, renewal of water, sewage, and electricity networks, and rehabilitation of schools and hospitals damaged during the war on terrorism.
Several government centers and public service buildings were reopened, resuming services more effectively than in past years.
In sports and culture, the city saw new stadiums opened and older ones renovated, enabling return of school, local and even international tournaments. Youth and social activities resumed in full force, as evident from the bustling stadiums and youth centers.
Cultural facilities and public libraries, essential for community and educational events, were also restored and maintained.
At ports and airports, efforts focused on restoring infrastructure for transporting goods and passengers to boost commercial and economic activity.
These efforts included upgrading terminals and runways at airports, enhancements to docks and port facilities to ease local and regional logistics.
These improvements have boosted the city's capacity to receive goods and services, supporting local and international trade, and promoting openness to global markets.
City of Derna, which endured a difficult phase following a devastating cyclone, witnessed similar projects: reopening critical roads, rehabilitating educational and healthcare institutions, and repairing key infrastructure Restoring the city's infrastructure helped residents return to economic, agricultural and fishing activities, and eased suffering of families that experienced major losses.
These projects were not purely technical; they also included Local employment programs, on-site training for contractors and workers.
This helped create temporary and long-term job opportunities and transferred valuable technical skills to the local labor market. Some initiatives also included social support programs targeting vulnerable groups to accelerate community recovery.
The impact is now visible in daily life: more organized traffic, return of traders to markets, vibrant cultural centers and sports fields filled with children and youth.
However, challenges remain, including: the need for additional funding, sustaining maintenance efforts, and improved coordination between government bodies, local authorities and the private sector to ensure lasting results and expansion to other affected areas Another major shift has occurred in eastern Libya, which has in recent years witnessed intensive reconstruction efforts following a long period of unrest and counterterrorism operations by the armed forces.
These efforts have focused on Rehabilitating essential infrastructure such as roads, bridges, water and electricity networks.
They also include developing the health sector by restoring hospitals and clinics, supporting education sector by refurbishing schools and universities, and reviving industrial facilities, especially in oil and gas, the backbone of Libya's economy Reconstruction in eastern Libya plays a pivotal role in boosting the national economy by ensuring continuity of oil production and increasing revenue, creating job opportunities and reducing unemployment, and promoting social stability.
Improved infrastructure also helps attract local and foreign investment and supports economic diversification away from oil, fostering private sector growth.
Despite progress, reconstruction efforts face challenges such as local conflicts, funding shortage and need for better coordination among stakeholders.
With continued political and financial support, reconstruction in eastern Libya was expected to significantly strengthen the national economy and drive sustainable development contributing positively to the country's overall stability.
Oil was not the only focal point. The National Development Agency launched the "Agricultural Circles" Project as part of the development plan for the Dabbawat Agricultural Project in Wadi Al-Shati, southwestern Libya.
The project aims not only to ensure food security but also create jobs, stimulate transport and distribution sectors, and contribute to economic diversification and reduce reliance on oil.
As part of Libya Vision 2030, the Sirte Free Zone project was reactivated, with investments worth USD two billion.
The project includes three main phases to develop Sirte Port into a regional hub for shipping and distribution, creating over 2,000 direct jobs and 4,000 indirect jobs in logistics and supply chain services.
The year 2025 revealed a delicate equation for Libya's economy: strong growth potential driven by oil sector, emergence of banking, agricultural and logistical reforms, but also deep-rooted challenges linked to political instability and weak institutional foundations.
Key initiatives like the Sirte Free Zone, central agriculture in Wadi Al-Shati, modernization of the Zawiya Refinery and digital projects at the Central Bank of Libya indicate that transformation was underway.
However, transforming these efforts into sustainable development depends on integration of reforms, establishing a stable political environment and unifying the national economic vision.
The National Oil Corporation announced a commercial oil discovery in the Ghadames Basin, made by Algeria's Sonatrach, boosting Libya's role as one of North Africa's top oil producers.
Production from the new find was expected to reach 4,200 barrels per day, while Libya's overall output has exceeded 1.3 million bpd, according to the National Oil Corporation.
This new discovery enhanced Libya's production capacity and opened door for greater regional energy cooperation with Algeria, especially amid rising global demand for oil and gas. (end) eng