Yemen: Economy#
Yemen is a low-income country that faces difficult long-term challenges to stabilizing and growing its economy, and the current conflict has only exacerbated those issues. The ongoing war has halted Yemen’s exports, pressured the currency’s exchange rate, accelerated inflation, severely limited food and fuel imports, and caused widespread damage to infrastructure. At least 82% of the population is in need of humanitarian assistance.Prior to the start of the conflict in 2014, Yemen was highly dependent on declining oil resources for revenue. Oil and gas earnings accounted for roughly 25% of GDP and 65% of government revenue. The Yemeni Government regularly faced annual budget shortfalls and has tried to diversify the Yemeni economy through a reform program designed to bolster non-oil sectors of the economy and foreign investment. As part of these reform efforts, Yemen exported its first liquefied natural gas in October 2009. The international community supported Yemen’s efforts toward economic and political reform in part by establishing the Friends of Yemen group. In 2012, the Friends of Yemen pledged nearly $7 billion in assistance to Yemen. In July 2014, the government continued reform efforts by eliminating some fuel subsidies and in August 2014, the IMF approved a three-year, $570 million Extended Credit Facility for Yemen.
However, the conflict that began in 2014 stalled these reform efforts. Rebel Huthi groups have interfered with Ministry of Finance and Central Bank operations and diverted funds for their own use. Yemen’s Central Bank reserves, which stood at $5.2 billion prior to the conflict, currently stand at $1.5 billion. The Central Bank is exposed to approximately $7 billion in overdraft, more than three times the legal limit, directly linked to the Huthis withdrawing $116 million on a monthly basis. The private sector is hemorrhaging, with almost all businesses making substantial layoffs. The Port of Hudaydah, which handles 60% of Yemen’s commercial traffic, was damaged in August 2015 as a result of the conflict and is only operating at 50% capacity. Access to food and other critical commodities such as medical equipment is limited across the country due to security issues on the ground. The Social Welfare Fund, a cash transfer program for Yemen’s neediest, is no longer operational and has not made any disbursements since late 2014.
Yemen will require significant international assistance during and after the protracted conflict to stabilize its economy. Long-term challenges include a high population growth rate, high unemployment, declining water resources, and severe food scarcity.
Economic Facts#
| GDP (purchasing power parity) | $73.45 billion (2016 est.) $76.68 billion (2015 est.) $106.6 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $31.33 billion (2015 est.) |
| GDP - real growth rate | -4.2% (2016 est.) -28.1% (2015 est.) -0.2% (2014 est.) |
| GDP - per capita (PPP) | $2,500 (2016 est.) $2,700 (2015 est.) $3,900 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | -2.9% of GDP (2016 est.) -3.7% of GDP (2015 est.) 6.2% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 101.7% government consumption: 10.9% investment in fixed capital: 7.5% investment in inventories: -5.9% exports of goods and services: 0.9% imports of goods and services: -15.1% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 23.6% industry: 8.9% services: 67.5% (2016 est.) |
| Agriculture - products | grain, fruits, vegetables, pulses, qat, coffee, cotton; dairy products, livestock (sheep, goats, cattle, camels), poultry; fish |
| Industries | crude oil production and petroleum refining; small-scale production of cotton textiles, leather goods; food processing; handicrafts; aluminum products; cement; commercial ship repair; natural gas production |
| Industrial production growth rate | -27% (2016 est.) |
| Labor force | 7.47 million (2016 est.) |
| Labor force - by occupation | note: most people are employed in agriculture and herding; services, construction, industry, and commerce account for less than one-fourth of the labor force |
| Unemployment rate | 27% (2014 est.) 35% (2003 est.) |
| Population below poverty line | 54% (2014 est.) |
| Household income or consumption by percentage share | lowest 10%: 2.6% highest 10%: 30.3% (2008 est.) |
| Distribution of family income - Gini index | 37.9 (2009 est.) 37.3 (1999 est.) |
| Budget | revenues: $1.766 billion expenditures: $5.628 billion (2016 est.) |
| Taxes and other revenues | 5.6% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -12.3% of GDP (2016 est.) |
| Public debt | 92.2% of GDP (2016 est.) 86.3% of GDP (2015 est.) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 31.5% (2016 est.) 28.8% (2015 est.) |
| Central bank discount rate | NA% |
| Commercial bank prime lending rate | 27% (31 December 2016 est.) 25% (31 December 2015 est.) |
| Stock of narrow money | $3.31 billion (31 December 2016 est.) $4.993 billion (31 December 2015 est.) |
| Stock of broad money | $16.02 billion (31 December 2014 est.) $14.04 billion (31 December 2013 est.) |
| Stock of domestic credit | $6.82 billion (31 December 2016 est.) $10.23 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $NA |
| Current account balance | -$1.92 billion (2016 est.) -$2.065 billion (2015 est.) |
| Exports | $124.3 million (2016 est.) $1.364 billion (2015 est.) |
| Exports - commodities | crude oil, coffee, dried and salted fish, liquefied natural gas |
| Exports - partners | China 24.5%, UAE 16.5%, South Korea 10%, Saudi Arabia 10%, Kuwait 9.1%, India 8.5% (2015) |
| Imports | $3.624 billion (2016 est.) $4.793 billion (2015 est.) |
| Imports - commodities | food and live animals, machinery and equipment, chemicals |
| Imports - partners | UAE 20.9%, China 14.3%, Saudi Arabia 9.9%, Kuwait 7.4%, India 4.6% (2015) |
| Reserves of foreign exchange and gold | $639.6 million (31 December 2016 est.) $1.978 billion (31 December 2015 est.) |
| Debt - external | $7.661 billion (31 December 2016 est.) $7.697 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $NA |
| Exchange rates | Yemeni rials (YER) per US dollar - 284.9 (2016 est.) 228 (2015 est.) 228 (2014 est.) 214.89 (2013 est.) 214.35 (2012 est.) |