Photo: Bin Guidara

Libya had $44 billion balance of payments surplus in 2008,the Governor of the Central Bank of Libya said on Wednesday.

Farhat Omar Bin Guidara told the General People's Congress that Libya's foreign currency reserves were at $136 billion at the end of 2008.

"Libya enjoys the healthiest balance of payments in the world. Its balance of payments reached a surplus of $44 billion at the end of 2008," he told the General People Congress.

Oil producer Libya is among the few countries which are free of any foreign debt, which also helps it maintain a strong balance of payments.

"We have been cautious with the oil revenues since 1995. As a result, we have built a huge amount of foreign currency reserves which reached around $136 billion," he said.

"The central bank holds $67 billion of these reserves while the remaining $69 billion are with Libya Investment Authority," he added.

Guidara said the country's medium term financial situation would not be a source of concern despite the global financial crisis.

He saw the non-oil economy growing by 5-7 percent this year, with government spending the main engine of growth.

But he gave no estimate for growth for the whole economy which relies mostly on oil.
"Average inflation is expected to fall sharply this year as a result of the decline of prices of food and other imported goods as well as the fall of the euro-Libyan dinar parity," he added but gave no precise figures.

Libya's cumulative oil revenues were $462 billion for the 1970-2008 period, with average annual oil earnings at $11.8 billion, according to government data.

The government had spent $162.3 billion for the same period, or $4.3 billion on average per year, according to government figures released to the General People Congress meeting in Sirte.

Libya has adopted a limited open door policy for the last six years aiming to diversify the economy that is based on oil. Signs of economic recovery have been shown as the private sector has slowly began to emerge.