The impact of exports, imports, and population growth on economic growth in Libya: An econometric study using the ARDL model during the period (1990–2024)

The impact of exports, imports, and population growth on economic growth in Libya

Abstract

Economic growth is a fundamental indicator for assessing economic performance and the ability to achieve sustainable development, particularly in developing and rentier economies such as the Libyan economy, where growth is closely linked to the performance of the external sector (exports and imports) and demographic factors, especially population growth.

This study aims to analyze and measure the impact of exports, imports, and population growth on economic growth in Libya over the period (1990–2024), using the Autoregressive Distributed Lag (ARDL) model and the bounds testing approach to cointegration, based on annual data for Gross Domestic Product (GDP), exports (EXP), imports (IMP), and population growth (POP). The results reveal the existence of a long-run cointegrating relationship among the variables, showing a positive and significant impact of both exports and population growth on economic growth, while imports show no significant long-run effect. Furthermore, the Error Correction Model (ECM) reveals a rapid and effective adjustment mechanism that restores the economy to its equilibrium path following short-term shocks. The study concludes that economic growth in Libya derives its primary momentum from exports and population growth, with a limited role for imports in the long-run effect.