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Libya: Reserves under pressure

Despite the existence of two governments with competing claims over the authority and management of Libya’s finances, analysing the status of the budget is relatively simple. At the current rate of production, and at the current oil price, revenue in 2015 will be between $9bn and $11bn. Officially, spending is divided into five chapters: salaries, operations, development, subsidies and reserves. However, spending on just two chapters – wages and subsidies – is expected to top LYD39bn – equivalent to $29bn. Faced with an annual deficit of $18bn-$20bn, the CBL has no choice but to liquidate foreign reserves, which stood at about $80bn at the beginning of the year, according to the most optimistic sources, but which, according to more pessimistic evaluations, could be worth $50bn or less now.

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