The World Bank has revealed that Yemen’s national economy is encountering significant obstacles. In its report on the “Yemen Economic Monitor,” as cited by the Yemeni News Agency (SABA) on Thursday, the World Bank highlighted that the Yemeni government’s public finances experienced substantial deterioration in 2023.
Government revenues fell by more than 30% due to a sharp decline in oil revenues and a reduction in customs revenues.
The report pointed out that the blockade on oil exports had a major impact on the trade deficit, while foreign exchange reserves remained relatively stable thanks to financial support from partners, including the allocation of part of the International Monetary Fund’s Special Drawing Rights.
In response to these developments, the government implemented severe spending cuts, affecting essential public services and long-term economic growth.
The report also underscored the severe impact of escalating regional tensions, noting that Yemen’s economic outlook remains highly uncertain. The resumption of oil exports and broad economic recovery are unlikely without a lasting peace agreement.
The World Bank predicted in its report that Yemen’s GDP would shrink by 1% in 2024, following a 2% contraction in 2023 and modest growth of 1.5% in 2022.
It stated that from 2015 to 2023, Yemen experienced a 54% decline in per capita real GDP, leaving most Yemenis in poverty. Food insecurity affects half the population, and youth mortality rates have risen.
The report noted that the current account deficit increased to 19.3% of GDP in 2023, up from 17.8% in 2022.
In a comment included in the report, World Bank Country Manager for Yemen Dina Abu-Ghaida said, “The economic and humanitarian challenges in Yemen are intensifying, but the potential for recovery remains with the right international support and strategies.”
