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Libyan unity government should ease economic pressures

Thursday, April 1, 2021

Significance

The economy has faced major challenges recently: recurring disruptions to the oil and gas sector, state fragmentation and war between the government in Tripoli and the armed forces led by eastern commander Khalifa Haftar. Following agreements last year between Tripoli and Haftar to lift a nine-month oil blockade, oil production recovered sharply in the last quarter of 2020, reaching 1.28 million barrels per day (b/d) in December.

Impacts

  • The government may make ambitious new pledges on public and infrastructure spending.
  • Major new projects will still be slow to materialise, though the prime minister is likely to initiate rebuilding projects.
  • Plans for reconstruction projects will probably accelerate, but implementation will lag.
  • The oil sector will manage infrastructure upgrades efficiently.

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