Yemen Economic Forecast

Yemen Economic Outlook

October 5, 2021

The already dire economic situation quickly deteriorated at the outset of H2 amid a worsening currency crisis. The Yemeni rial—used in the area controlled by the internationally recognized government—plummeted to a record low in August, triggering violent protests in the southern region of the country in mid-September, prompting authorities to declare a state of emergency. The sharp deterioration of the currency likely pushed up inflation, making food inaccessible and putting more citizens on the brink of extreme poverty and famine. Meanwhile, fighting continues in the oil- and gas-rich Marib region, with the Houthis reportedly advancing on three different fronts, having captured two districts in recent weeks. A victory for the rebels in the government-controlled region would further threaten public finances.

Yemen Economic Growth

This year, GDP should recover modestly from last year’s projected downturn, although this will be largely due to a low base effect. In 2022, economic growth should pick up slightly. However, the current deadlock on peace talks and the lack of a nationwide ceasefire will impede the reconstruction of infrastructure to resume somewhat normal activity. FocusEconomics panelists project the economy to expand 1.2% in 2021 and 1.6% in 2022, which is also unchanged from last month’s forecast.

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)0.50.40.90.40.5
Imports (USD billion)6.66.96.97.49.3
Exports (annual variation in %)-81.7-15.2121-50.25.1
Imports (annual variation in %)-45.54.80.67.125.8
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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