The impact of inflation on economic stability in Libya during the period (2005-2023)

Abstract

Inflation is one of the most prominent economic phenomena that directly impacts economic stability, due to its repercussions on financial markets, fluctuations in growth rates, and weakening of the purchasing power of the national currency. This study aims to analyze the impact of inflation on economic stability in Libya during the period from 2005 to 2023. This study investigates the influencing factors and measures the relationship between inflation rates and economic stability indicators using econometric analysis tools.

The study adopts a descriptive analytical approach to explain the theoretical concepts related to inflation and economic stability, while employing a quantitative approach to analyze the relationship between the two variables based on official statistical data and appropriate econometric models.

The results revealed that inflation rates in Libya had a mixed impact on economic stability, as sharp fluctuations contributed to increased economic uncertainty. The results also demonstrated an inverse relationship between inflation rates and stability indicators, underscoring the urgent need to adopt more effective monetary and fiscal policies to reduce inflation and enhance the foundations of economic stability in the country.