Economic analyst Mohammed al-Shibani said that the official figures of the Central Bank of Libya (CBL) on the decline of inflation reflect a clear gap with the actual reality, noting that the fluctuations of the dinar exchange rate and weak purchasing power make the citizen face much higher inflation than what is announced.
The fluctuations of the dinar exchange rate in the parallel market are quickly transmitted to the prices of basic commodities, especially imported ones such as grains, oils and medicine, which leads to an increase in the cost of living beyond the official indicators, Sheibani told the Qatari website “The New Arab”.
The decline in the purchasing power of the dinar and the shrinking real incomes of citizens compound the impact of inflation, he added, noting that the official index relies on a specific basket of goods and services that may not accurately reflect the priorities of the Libyan family, which spends more than 60% of its income on food and utilities, the sectors that are most vulnerable to price fluctuations.
Sheibani pointed out that inflation in Libya is not limited to the digital aspect only, but is a social and economic phenomenon linked to the lack of liquidity, fluctuations in supply, market dependence on imports, speculation and monopoly, which makes prices rise quickly in crises and do not return to their previous levels even after stabilisation.
Mourning: For his part, banking expert Ibrahim al-Haddad said that the data published by the Central Bank is “inaccurate and needs clarification.” He asked: “Is it possible that inflation in Libya is only 1.4%, which is lower than Canada (1.9%), the United States (2.7%), Britain (3.6%), Russia (8.8%), Turkey (33.5%), and Argentina (36.6%)?”
Al-Haddad explained that the normal rate of inflation globally is between 2 and 4 per cent, stressing that several factors in Libya are pushing prices up, including production costs, market disruptions, increased demand and money supply, which is why official indicators should be treated with caution.