Yemen Economic Forecast

Yemen Economic Outlook

September 7, 2021

The economy will likely have remained in a dire state at the outset of H2 due to the effects of war and the pandemic. The Houthis stepped up their attacks further to capture the government-controlled oil- and gas-rich Marib region. Meanwhile, the Yemeni rial—used in government-controlled regions—recovered some ground against the USD after sinking to historic lows in early August. However, the currency freefall, combined with spiking food inflation, heightens the threat of severe famine in the country as food becomes increasingly unaffordable. In response, on 9 August, USAID announced it will send USD 165 million in additional humanitarian aid in a bid to mitigate food scarcity. Additionally, the IMF’s SDR general allocations became available on 23 August—Yemen’s quota is around USD 665 million worth of reserves—which should provide some relief to the country’s foreign reserves. Lastly, Johnson & Johnson shipped a first batch of about 151,000 doses in late August.

Yemen Economic Growth

GDP should grow modestly this year, mostly supported by a low base effect. The deadlock on peace talks and the lack of a nationwide ceasefire leave a large share of the population depending on foreign aid to survive, while the two divided economic and monetary policies currently impede the distribution of funds and the reconstruction of infrastructure to resume somewhat normal activity. FocusEconomics panelists project the economy to expand 1.2% in 2021, which is down 0.2 percentage points from last month’s forecast, and 1.6% in 2022.

Yemen Economy Data

2015 2016 2017 2018 2019
Population (million)28.329.130.030.831.6
GDP per capita (USD)943849806866-  
GDP (USD bn)26.724.724.226.7-  
Economic Growth (GDP, annual variation in %)-30.5-14.6-10.0-1.3-  
Fiscal Balance (% of GDP)-10.0-9.2-5.3-6.3-  
Public Debt (% of GDP)65.579.684.364.8-  
Inflation Rate (CPI, annual variation in %)22.021.330.427.614.7
Policy Interest Rate (%)15.0015.0015.0027.0027.00
Exchange Rate (vs USD)215.2250.2250.3250.2250.4
Exchange Rate (vs USD, aop)215.0241.0250.3250.2250.2
Current Account (% of GDP)-9.8-3.6-0.2-1.9-  
Current Account Balance (USD bn)-2.6-0.90.0-0.5-1.2
Trade Balance (USD billion)-6.1-6.5-6.1-7.0-8.9
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)-81.7-15.2121-50.25.1
Imports (annual variation in %)-
International Reserves (USD)2.01.0-  -  -  
External Debt (% of GDP)27.428.529.826.4-  

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Yemen Facts

Value Change Date
Exchange Rate250.40.0 %Dec 31
Stock Market0.60.0 %Dec 31

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