IMF: Libya could be driver of Mideast economy

Author: Nehal El-Sherif

   Cairo (dpa) - Libya could drive economic activity in the Middle East and North Africa (MENA) region in 2012-13, the International Monetary Fund (IMF) said Tuesday, despite recent challenges to the country's political stability.

   Libya was not included in the IMF's September 2011 projections due to the uncertain political situation at the time.

   Excluding Libya, MENA growth projections for 2012 and 2013 are lower than the IMF predicted in September, the organization said Tuesday.

   However if Libya is included, economic activity in the region is expected to accelerate, driven by the country's recovery and the continued strong performance of other oil exporters.

   According to Daniel J Graeber, a senior analyst for Oil Price energy news site, "even the most pessimistic oil analysts are surprised at how fast Libyan oil production is back online."

   However, observers have said that damage to Libya's infrastructure could impede an increase in oil export capacity, while internal political rivalries are a challenge for the country's economic development.

   Libya has witnessed several protests and clashes since the fall of slain leader Moamer Gaddafi.

   On Monday, four people were killed when clashes erupted in the key oil town of Bani Walid, south-east of Tripoli.

   A day before that, dozens of Libyans stormed the ruling National Transitional Council's headquarters, in the eastern city of Benghazi, in protest at the perceived slow pace of reform.

   In December, OPEC's Secretary General Abdullah al-Badri said Libya's "strong comeback" would have a large impact on the oil market.

   On a regional level, the IMF said that most oil-importing countries, such as Egypt and Tunisia, faced muted growth prospects due to "longer-than-expected political transitions and an adverse external environment."