Yemen Economic Forecast

Yemen Economic Outlook

May 12, 2020

Coalition forces backing the internationally-recognized government in the east of Yemen in its conflict with Houthi rebels in the west of the country agreed to extend its unilateral ceasefire from 23 April by one month. This should help authorities respond to the challenges posed by the national spread of coronavirus; however, the decision of southern separatists to declare self-rule in late April complicates broader peace-building efforts. Confirmed cases and deaths of coronavirus within Yemen have gradually risen, despite authorities imposing restrictions on daily life to limit its spread, including travel restrictions; these restrictions will hamper an economy already suffering from five years of war. On the external front, the recent fall in oil prices will benefit the economy given that Yemen is a net oil importer, although this will be offset by an expected drop in remittance inflows and rising prices for imported food.

Yemen Economic Growth

The economy is seen falling back into contraction this year, after seemingly growing for the first time in six years last year. The coronavirus crisis and associated social distancing measures will severely restrict activity, while remittances inflows are likely to fall, compounding downward pressure on private consumption. Tentative steps towards peace represent an upside risk, however. FocusEconomics panelists project the economy to contract 4.0% in 2020, which is down 8.3 percentage points from last month’s forecast, before growing 2.9% in 2021.

Yemen Economy Data

2014 2015 2016 2017 2018
Population (million)27.528.329.130.030.8
GDP per capita (USD)1,210943849806866
GDP (USD bn)33.226.724.724.226.7
Economic Growth (GDP, annual variation in %)-10.6-30.5-14.6-10.0-1.3
Fiscal Balance (% of GDP)-4.1-10.0-9.3-5.3-6.3
Public Debt (% of GDP)48.765.579.684.364.8
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)15.0015.0015.0015.0027.00
Exchange Rate (vs USD)215.0215.2250.2250.3250.2
Exchange Rate (vs USD, aop)215.0215.0241.0250.3250.2
Current Account (% of GDP)-4.5-9.7-3.5-0.10.0
Current Account Balance (USD bn)-1.5-2.6-
Trade Balance (USD billion)-9.6-6.1-6.9-6.5-7.3
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)-64.6-81.5-61.9203-15.0
Imports (annual variation in %)-9.1-45.58.0-0.610.0
International Reserves (USD)  -  
External Debt (% of GDP)23.627.428.529.826.4

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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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