(Author: Libyan Gazette Editorial Staff)
The Libyan dinar is falling at an alarming rate as a result of ongoing clashes in various regions of the country, according to a World Bank report.
Libya’s income from January to July was $2.28 billion, only a tenth of Libya’s income in the first seven months of 2015. The value of the Libyan dinar decreased by 73 percent in comparison to the black market’s dollar.
Libya’s financial struggles at a state level have trickled down to the Libyan people who face rising prices of food and other basic commodities by 31 percent during the first half of this year.
The report indicates that “Wages also fell by 8.7 percent, reflecting efforts to remove duplicate payments from government payrolls through extending and enforcing the use of the national identification number.”
In addition, oil production, Libya’s main source of income, is not being produced at full capacity. Libya’s economy has plummeted and decreased by about 8.3 percent and is struggling to stabilize since falling into a recession in 2013.
“With oil production just a fifth of the potential, revenues have plummeted, pushing fiscal and current account deficits to record highs. With the dinar rapidly losing value, inflation has accelerated, further eroding real incomes,” the World Bank Recent Developments report said.
As crude oil prices fell as a result of decreased oil production, in comparison to production levels before the 2011 Libyan uprising, Libya’s foreign reserves split in half “from $107.6 billion in 2013 to an estimated $43billion by end-2016.”
Libya’s GDP per capita dropped nearly two-thirds, to $4,458, in comparison to the level it was at before the revolution.
“Unless immediate and target action is taken to address the humanitarian crisis, the situation is unlikely to improve. The situation in Libya is such that simply relying on a slightly improved macro outlook is unlikely to bring about significant change,” said the report.