Libya: impact of COVID-19 on GDP 2019-2022

The Libyan economy suffered from the impact of the coronavirus (COVID-19) pandemic. In 2020, the country's real Gross Domestic Product (GDP) declined dramatically by over 60 percent. This was the sharpest GDP contraction in North Africa in that year. Nevertheless, projections made in December 2020 showed that the country's economy would recover in 2021 and 2022, with a positive growth of the GDP.

Worse decline than expected

According to previous estimates conducted by the same source, without the pandemic, the country’s GDP would have expanded by 4.8 percent in 2020 and 4.9 percent in 2021, respectively. Moreover, within the scenario that the pandemic continued until the end of 2020, the GDP growth was projected at minus 43.7 percent. These calculations were made in July 2020. As displayed, projections have been subsequently updated, showing a significantly stronger impact of the coronavirus (COVID-19) crisis on the Libyan GDP, contrary to earlier estimates. This could be explained by the deteriorating health situation, with Libya being among the African countries with the highest number of confirmed cases since the beginning of the pandemic, as well as the impact of the outbreak on the country’s key sectors.

Economic impact of COVID-19

The coronavirus (COVID-19) spread rapidly in Libya and the health crisis impacted economic growth, already challenged by social and political instability and poor national security due to the Libyan conflict. Furthermore, the country’s economy is heavily reliant on oil, with oil rents accounting for over 43 percent of the GDP in 2018. The global crisis due to COVID-19 determined a considerable fall in oil prices, undermining the profitability of the hydrocarbon sector. In 2020, oil exports from Libya fell dramatically by around 71 percent compared to the previous year.