Economic improvements in Libya hinge on political deal

Significance

The split in government since mid-2014 has contributed to a prolonged and severe contraction of the oil and gas sector. Before the revolution in 2011, Libya was a major target for oil and gas investment.

Impacts

• Pressure may grow on the central bank to devalue the Libyan dinar for the first time since 2001.
• Levels of oil production are likely to remain volatile into next year.
• International sanctions affecting Libyan investments will not be lifted before 2017.