{"id":257719,"date":"2026-08-03T00:51:32","date_gmt":"2026-08-02T22:51:32","guid":{"rendered":"https:\/\/sada.ly\/en\/?p=257719"},"modified":"2026-08-04T00:54:09","modified_gmt":"2026-08-03T22:54:09","slug":"al-shaibi-inflation-in-libya-in-2026-international-and-local-figures-agree-the-cost-of-living-crisis-has-entered-a-new-phase","status":"publish","type":"post","link":"https:\/\/sada.ly\/en\/al-shaibi-inflation-in-libya-in-2026-international-and-local-figures-agree-the-cost-of-living-crisis-has-entered-a-new-phase\/","title":{"rendered":"Al-Shaibi: Inflation in Libya in 2026 \u2014 International and Local Figures Agree: The Cost-of-Living Crisis Has Entered a New Phase"},"content":{"rendered":"\n
Written by banking expert \u201cImran Al-Shaibi\u201d<\/p>\n\n\n\n
After years in which inflation remained relatively stable\u2014around 2% in 2024 and 2025\u2014international and local sources now agree on one fact: prices in Libya are rising at a pace not seen in years.<\/p>\n\n\n\n
What do international institutions say?<\/strong><\/p>\n\n\n\n The International Monetary Fund (April 2026) expects inflation to reach 9.5% by the end of this year and warns that it could remain above 10% in the coming years if current policies continue, describing Libya’s fiscal trajectory as unsustainable.<\/p>\n\n\n\n As for the World Bank, it forecasts 3.2%, while the African Development Bank forecasts 2.5%. These are optimistic projections, but they were based on data from before the latest wave of price increases, and subsequent events have far exceeded those projections.<\/p>\n\n\n\n Trading Economics (August 2026) expects inflation to reach 14.1% by the end of the year.<\/p>\n\n\n\n As for indicators from Libyan institutions themselves, the economic bulletin of the Central Bank of Libya (the public budget revenues and expenditures table) indicates that inflation reached 12.7% through June 2026, after standing at just 2.6% at the end of 2025\u2014meaning it increased fivefold in six months.<\/p>\n\n\n\n Salaries are consuming the budget, rising from LYD 33 billion in 2021 to LYD 73.4 billion in 2025, more than doubling in four years.<\/p>\n\n\n\n In the first quarter of 2026 alone, salaries reached LYD 12 billion, representing 79% of total expenditure. Subsidies also doubled in just one year, rising from LYD 16 billion in 2024 to LYD 34.5 billion in 2025, including LYD 16.8 billion for fuel subsidies alone after their return to the budget.<\/p>\n\n\n\n Salaries and subsidies accounted for 99% of first-quarter 2026 expenditures (LYD 15.2 billion), while development spending amounted to zero dinars or was not included in the economic bulletins.<\/p>\n\n\n\n The near-total dependence on oil is evident in first-quarter revenues of LYD 24.3 billion, of which LYD 23.7 billion came from oil (97.5%), compared to just LYD 600 million in non-oil revenues. The Treasury also lost LYD 12 billion annually following the cancellation of the foreign-currency sales tax. Meanwhile, the Audit Bureau estimates that the Libyan economy can absorb only around LYD 105 billion in annual spending, while actual total spending\u2014including expenditure outside the unified budget\u2014far exceeds that amount.<\/p>\n\n\n\n Why is this happening?<\/strong><\/p>\n\n\n\n The equation is simple: spending that goes entirely toward salaries and subsidies, with no investment in production, creates excess demand for dollars, which in turn leads to a depreciation of the dinar and causes the prices of everything we import to rise. Libya imports most of its needs\u2014the dinar is 95% exposed to foreign currency\u2014which means rising prices eat into citizens’ incomes. Added to this is imported inflation resulting from higher oil and shipping costs.<\/p>\n\n\n\n However, given the extreme rise in prices, particularly food prices, during this period, I believe that actual inflation may have exceeded the reported figure by several multiples. Perhaps we can attempt to determine the real figures through practical comparisons in the coming period, although prices are changing upward on a daily basis.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Written by banking expert \u201cImran Al-Shaibi\u201d After years in which inflation remained relatively stable\u2014around 2% in 2024 and 2025\u2014international and local sources now agree on one fact: prices in Libya are rising at a pace not seen in years. What do international institutions say? The International Monetary Fund (April 2026) expects inflation to reach 9.5% […]<\/p>\n","protected":false},"author":13,"featured_media":257720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":0,"footnotes":""},"categories":[683],"tags":[613],"class_list":["post-257719","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-articles","tag-libya"],"acf":[],"yoast_head":"\n