Yemen Economic Forecast

Yemen Economic Outlook

November 3, 2020

The economy will have deteriorated notably so far this year. At the outset of the Covid-19 pandemic earlier in the year, the country had been in a civil war for five years, which left little means and infrastructure to tackle the health crisis: The collapsing health system is unable to tackle concurrent coronavirus, polio and cholera outbreaks, worsened by the lack of safe water and sanitation. Moreover, flash floods and the locust infestation continue to weigh on agricultural production, jeopardizing food security and threatening further malnutrition. In a somewhat silver lining, in early October the IMF approved a six-month extension of debt service relief to 28 low-income countries, including Yemen. Moreover, it seems that Covid-19 cases have stabilized in recent weeks, after a spike in June–August.

Yemen Economic Growth

The economy is set to continue contracting in the coming months, as lingering uncertainty over the pandemic remains. Prospects for next year are not reassuring, as international aid has become more limited in recent months and peace talks are not moving forward, risking not only the continuation of conflict, but its escalation, which could derail a possible recovery. FocusEconomics panelists project the economy to expand 2.2% in 2021, which is down 1.7 percentage points from last month’s projection, and 3.0% 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)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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