The impact of development spending on the growth of oil GDP in Libya: An analytical study for the period (2000-2019)

Abstract

This study aims to analyze and measure the impact of development (investment) spending on the growth of oil GDP in Libya during the period 2000–2019. Using data from the Central Bank of Libya and official economic reports, the study examined the evolution of development spending and its growth rates, alongside the performance of oil GDP and its relative importance in the Libyan economy. The findings reveal that development spending fluctuated significantly due to political and security instability, while oil GDP continued to represent the largest share of total GDP, reflecting the rentier nature of the Libyan economy. Results also indicate a positive relationship between increased development spending and oil GDP growth in certain periods, although crises weakened this effect. The study concludes that improving the efficiency of development spending and directing it toward oil infrastructure can contribute to sustaining production and supporting economic growth.