+971 4 420 5154 info@arabianmonitor.com

Yemen is one of the poorest countries in the Arab region and has been listed as one of the least developed countries in 2013 by UNCTAD. It is one of the most food insecure countries in the region with more than 45% of the total population being food insecure. The political crisis Yemen experienced in 2011 led to serious setbacks in terms of economic performance with GDP growth falling by 12%. There have been improvements since 2012 though fiscal deficit has been widening due to frequent oil pipeline disruptions and high inflation has been persisting as well.  There is an urgent need to need to implement key reforms, including a gradual reduction in the large energy subsidies, in order to facilitate an increase in targeted transfers and infrastructure investment that would better benefit the poor and promote job creation and growth. The short-term outlook is cautiously positive given that in January 2014 Yemen concluded a 565-member National Dialogue process started in March 2013, with the decision to transform Yemen into a Federal State. The growth forecast for 2014 is 3.4%. The risk is a worsening of the political situation, which might lead to a further deterioration of the economic situation.

Yemen has limited resources including a small amount of arable land, scarce water supplies, declining oil reserves and the largest informal economy in the region, making accurate economic assessments challenging. Those meager oil resources dominate the economy, accounting for an estimated 20% of GDP, 40% of revenue and 90% of export earnings. The World Bank, however, expects those reserves to fall to zero within three years. Agriculture accounts for about 11% of GDP, much of it performed at a subsistence level. Khat is the largest cash crop. Yemen receives about 20% of GDP from trade and transport services, a benefit of its position astride the Red Sea and the Gulf of Aden. Tourism is stunted by poor infrastructure and security concerns. Yemen lacks a stock exchange and has a banking system consisting of the Central Bank of Yemen and 15 commercial banks, many of which have struggled with solvency, non-competing loans, low capitalization and weak enforcement.

  • No Data Found

Latest Reports

    Can't create/write to file '/tmp/#sql_3a4_0.MYI' (Errcode: 122)