World Bank: The Yemeni economy faces major obstacles and food insecurity affects half of the population

The World Bank said that the Yemeni economy faces major obstacles, as the ongoing conflict and regional tensions exacerbate the economic and humanitarian crises that the country is suffering from.

In a report issued today, Thursday , he expected that Yemen's gross domestic product (GDP) would contract by 1.0% in 2024, after witnessing a contraction of 2.0% in 2023 and a modest growth of 1.5% in 2022.

He pointed out that between 2015 and 2023, Yemen witnessed a 54% decline in the real GDP per capita, leaving most Yemenis in the cycle of poverty. Food insecurity affects half the population, and mortality rates among young people have risen.

The report stated that the public finances of the internationally recognized government witnessed a significant deterioration in 2023, and that its revenues decreased by more than 30%, due to the significant decline in oil revenues, and the decline in customs revenues due to the redirection of imports from Aden to the ports that are under the control of the Houthis.

In response, the internationally recognized government implemented sharp spending cuts, impacting essential public services and long-term economic growth.

The report indicated that the current account deficit witnessed an increase of 19.3% of GDP in 2023, after it was high by 17.8% in 2022.

The blockade imposed on oil exports also had a significant impact on the trade deficit, while foreign exchange reserves remained relatively stable thanks to the financial support provided by partners, including transferring part of the Special Drawing Rights to the International Monetary Fund.

The report stressed that Yemen's economic prospects are still characterized by a great deal of uncertainty, and the resumption of oil exports and a broad-based economic recovery are far-fetched without reaching a permanent peace agreement.

Ongoing regional conflicts, currency depreciation, and pressures on public finances pose significant risks. However, the report notes that a lasting peace agreement could quickly improve Yemen's economic prospects, along with external financial aid and reconstruction efforts.