World Bank Sharply Cuts Libya's 2026 Growth Forecast to 1.4%
The World Bank released its latest forecast for Libya's economy on Tuesday, projecting growth of 1.4% in 2026 before accelerating to 2.9% in 2027, according to the bank's updated regional economic report.
The new projection marks a significant downgrade from the bank's previous outlook published earlier this year, which had forecast Libyan growth of 4.5% in 2026 and 4.0% in 2027. The scale of the revision points to a sharply deteriorating picture for Libya's hydrocarbon-dependent economy over the course of 2026.
The downgrade comes within a broader regional reassessment. The World Bank's latest Middle East, North Africa, Afghanistan and Pakistan (MENAAP) update attributes the weaker outlook to disruptions linked to Middle East conflict, which has affected energy supply routes and infrastructure across the region and weakened the overall 2026 growth picture. Excluding Iran, regional growth is expected to slow from 4.0% in 2025 to 1.8% in 2026.
The bank's forecasts point to a stronger rebound across the region in 2027, with growth excluding Iran projected to reach as high as 7.8% if the conflict eases by the end of 2026, though it cautions this would largely reflect a recovery of lost production and export capacity rather than a durable improvement in long-term productive capacity. Within this regional picture, Libya's projected 2.9% growth for 2027 compares with 3.4% forecast for Algeria over the same year.
Libya's economic outlook has repeatedly proven sensitive to swings in oil output and regional security conditions. Earlier World Bank assessments have specifically flagged declining oil production in Libya, alongside Iran, as a factor weighing on the wider region's growth recovery.
