Country Report Libya February 2011

Outlook for 2011-15: Fiscal policy

The government has usually had a healthy budget surplus in recent years owing to high oil revenue and a tendency not to fulfil its spending commitments. The Economist Intelligence Unit estimates that the 2010 surplus was 8.9% of GDP, well below the average of 21.5% in 2006-09, mainly owing to increased spending. Current expenditure is being driven higher as efforts to cut the size of the civil service have been delayed, a public-sector pay rise is planned and subsidies will be kept in place to control consumer prices. In 2011-15 oil prices will remain relatively high at an average of US$80.4/barrel. However, this will not be high enough to give the government confidence to increase significantly capital expenditure, which will therefore remain relatively stagnant. The upshot will be an increase in the budget surplus to 13.5% of GDP in 2011. This will fall slightly before rising again to 14.5% of GDP in 2015 as oil prices follow a similar trend.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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