Economic consultant Waheed Al-Jabu considered the announcement of the unified budget agreement a welcome step. He believes it will have positive repercussions for the Libyan economy and its stability. Writer and banker Kamal Al-Mazoughi, however, viewed the unified spending agreement differently. He stated it sends positive messages to the markets. Its success remains linked to serious implementation. It also depends on the stability of the political situation.
Strengthening the Dinar and Reducing the Deficit
Al-Jabu clarified in special statements to Sputnik agency. He said implementing this agreement would strengthen the Libyan Dinar’s purchasing power. It would also contribute to reducing the budget deficit. At the very least, it would limit it.
He pointed out that the previous division between the eastern and western governments led to excessive and irrational spending. This sometimes amounted to squandering public funds. He affirmed that a single government requires adopting a unified and agreed-upon budget. This paves the way for ending the financial and administrative division.
Paving the Way for Unifying the Executive Authority
Al-Jabu added that this step paves the way for unifying the executive authority in Libya. This would limit excessive spending. It would also direct efforts towards real economic reforms. These reforms include increasing oil production. They also involve diversifying income sources. Furthermore, they include combating corruption. They address distortions from which the economy suffers.
He also emphasized the importance of boosting revenues. Financial flows to the Central Bank of Libya are crucial. The Central Bank is responsible for managing state funds. Alongside this, there is a need to address the budget deficit. The public debt must also be extinguished. He stated this debt played a major role in the Dinar’s declining purchasing power. It also contributed to the state’s inability to meet its financial obligations.
Supporting Development and Forming a Strategic Reserve
Al-Jabu noted that the success of this agreement will open the door for resuming development programs. This will contribute to creating added value for the national economy. It will enhance efforts to combat unemployment. It will also improve the standard of living.
He called for utilizing current high oil prices. This should be done by establishing a strategic reserve. This reserve would be in anticipation of any future price decline. This is especially important amid global market fluctuations.
Positive Messages for Markets and Gradual Impact on Prices
For his part, writer and banker Kamal Al-Mazoughi said the unified spending agreement is a correct and important step. It moves towards unifying expenditure and curbing financial chaos. It also sends positive messages to the markets.
Al-Mazoughi clarified in special statements to Sputnik agency that the agreement’s impact on prices will be gradual. He suggested markets would not see an immediate short-term decrease. This is due to continued high demand for the dollar. It is also because of weak market confidence in rapid implementation.
Success Hinges on Implementation and Stability
He added that in the medium term, the agreement might contribute to achieving some stability. It could potentially lead to a decrease in the dollar’s price. This would reflect in alleviating inflation rates. It would also bring a relative improvement in prices.
Al-Mazoughi affirmed that the agreement is not a magic solution to the economic crisis. However, he sees it as a step in the right direction to control spending. It aims to reduce the effects of division. He emphasized that its success remains contingent on serious implementation. It also depends on the stability of the country’s political situation.