Libya expects annual inflation to fall to six per cent by the end of this year from 11 per cent in the first quarter of this year, said Ali Ramadan Shnebesh, who heads the Central Bank's research and statistics department.

"Almost 65 per cent of Libya's inflation is imported. We expect this imported inflation to stabilise, not increase in the three latest quarters of 2008," Mr Shnebesh told Reuters.

"We see inflation decreasing this year and that decline would be clear in the fourth quarter of 2008 when inflation would end at six per cent as prices of imported foods stabilise," Mr Shnebesh said.

Food prices were the main factor feeding a rise in inflation since last year as Libya, an Opec member, imports most of its food needs, he said.

"Inflation appeared clearly last year to reach an average of 6.7 per cent. Inflation jumped to more than 10 per cent in the fourth quarter of last year," he added. "That inflation rising trend continued in the first quarter of this year to reach 11 per cent for that period of 2008."

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