The Impact of the Budget Deficit on Economic Performance: An Analytical Study on the Libyan Economy
DOI:
https://doi.org/10.65420/4g4agx08Abstract
This analytical study examines the effect of the fiscal budget deficit on economic performance in Libya, a rentier economy where oil finances approximately 90% of government revenue, causing the budget balance to fluctuate severely between surpluses and deficits based on oil production and global prices. Documenting a fiscal shift from a surplus of 23.6% of GDP in 2022 to a deficit of 30% in 2025 alongside a high wage bill, the study utilizes four theoretical frameworks: Keynesian theory, Ricardian equivalence (Barro, 1974), the crowding-out effect without interest-rate tools, and the twin-deficits hypothesis. Empirical evaluation on recent data indicates a strong correlation between the fiscal balance and the trade balance, providing indicative support for the twin-deficits hypothesis.
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ثانياً: مراجع أجنبية ونظرية
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