ECONOMY

Economy—overview: The socialist-oriented economy depends primarily upon revenues from the oil sector, which contributes practically all export earnings and about one-third of GDP. Per capita GDP is the highest in Africa at $6,700, but disproportionately little of national income flows down to the lower orders of society. GDP growth fluctuates sharply in response to changes in the world oil market; GDP has either contracted or grown very sluggishly since 1992. Import restrictions and inefficient resource allocations have led to periodic shortages of basic goods and foodstuffs. The nonoil manufacturing and construction sectors, which account for about 20% of GDP, have expanded from processing mostly agricultural products to include the production of petrochemicals, iron, steel, and aluminum. Although agriculture accounts for only 5% of GDP, it employs 18% of the labor force. Climatic conditions and poor soils severely limit farm output, and Libya imports about 75% of its food requirements. The UN sanctions imposed in April 1992 do not have a major impact on the economy although they have increased transaction and transportation costs.

GDP: purchasing power parity—$38 billion (1997 est.)

GDP—real growth rate: 0.5% (1997 est.)

GDP—per capita: purchasing power parity—$6,700 (1997 est.)

GDP—composition by sector:
agriculture: 5%
industry: 55%
services: 40% (1996 est.)

Inflation rate—consumer price index: 30% (1997 est.)

Labor force:
total: 1 million
by occupation: industry 31%, services 27%, government 24%, agriculture 18%
note: 3% of the population in the 15-64 age group is non-national (July 1998 est.)

Unemployment rate: 25% (1997 est.)

Budget:
revenues: $10.4 billion
expenditures: $10.3 billion, including capital expenditures of $2.5 billion (1995 est.)

Industries: petroleum, food processing, textiles, handicrafts, cement

Industrial production growth rate: NA%

Electricity—capacity: 4.6 million kW (1995)

Electricity—production: 17 billion kWh (1995)

Electricity—consumption per capita: 3,239 kWh (1995)

Agriculture—products: wheat, barley, olives, dates, citrus, vegetables, peanuts; meat, eggs

Exports:
total value: $9 billion (f.o.b., 1995)
commodities: crude oil, refined petroleum products, natural gas
partners: Italy, Germany, Spain, France, Turkey, Greece, Egypt

Imports:
total value: $6.2 billion (f.o.b., 1995)
commodities: machinery, transport equipment, food, manufactured goods
partners: Italy, Germany, UK, France, Spain, Turkey, Tunisia, Eastern Europe

Debt—external: $2.6 billion excluding military debt (1995 est.)

Economic aid: $NA

Currency: 1 Libyan dinar (LD) = 1,000 dirhams

Exchange rates: Libyan dinars (LD) per US$1—0.3902 (January 1998), 0.3891 (1997), 0.3651 (1996), 0.3532 (1995), 0.3596 (1994), 0.3250 (1993)

Fiscal year: calendar year

In 1992-93, the Libyan Government embarked on a gradual economic liberalization program. Recent developments include the issuance of regulations governing the privatization of selected public enterprises and the lifting of restrictions on private wholesale trade. Its economy remains dependent upon revenues from exported crude oil. Currently, oil production is 1.5 million barrels per day.

During the 1970s, Libyan Government expenditures did not keep pace with the rapid rise in oil revenues. The resulting surplus led to the growth of large central bank foreign exchange reserves. At their peak, these reached $14 billion in 1981, but OPEC's production restraints and softening oil prices led to revenue shortfalls, which have resulted recently in an annual drawdown of foreign exchange reserves by about $2 billion per year. Reserves dropped to $3.5 billion in 1993.

Since 1981, fiscal difficulties associated with declining oil revenues combined with the effects of various socialist schemes have hurt merchants and other business professionals. Although Libyans have experienced a dramatic rise in the standard of living during the past 20 years, more recent economic austerity measures as well as tighter internal security controls have caused a general deterioration in the quality of life for many Libyans. Nonetheless, distribution of national wealth remains more equitable in Libya than in many other developing countries.

Libya's major trading partners are Italy, Germany, Spain, France, and countries of the former Soviet Union. In response to Libyan support of terrorism, the U.S. Government prohibited the importation of Libyan crude oil into the United States in March 1982 and imposed strict controls on U.S.-origin goods intended for export to Libya. A total ban on trade with Libya went into effect in January 1986.

Although agriculture is the second-largest sector in the economy, Libya is self-sufficient in few foods. Higher incomes and a growing population have caused food consumption to rise. Domestic food production meets only about 25% of demand. A long-term objective is to become self-sufficient in agriculture, although the scarcity of water is a serious obstacle. Libya is undertaking a multi-billion-dollar project to tap water resources deep under the Sahara to meet coastal population water needs in the 1990s. However, technical and administrative problems are hindering progress.