Yemen Market Watch Report, Issue No. 1 (May 2016)

Situation Report
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Market situation update for May 2016. Key highlights include:

  • Limited availability of foreign currency pushed the parallel exchange rate up to 300 YER for 1 USD.
  • Food commodity prices are constantly rising, leading to an increase in the monthly cost of the basic food basket.
  • Fuel commodities are all more expensive in May 2016 than in April.
  • Food commodities availability in May 2016 is worse than in April while the fuel commodities are scarcely available across the whole country.
  • Taiz shows the highest prices of fuel and food commodities.
  • According to Alert for Price Spikes (ALPS) methodology, the national red beans market is on crisis, while vegetable oil is on stress and sugar.

Macroeconomic Situation

The Yemeni economy deterioration continues as the crisis is unremitting. The deficit in the public budget was estimated at $5.8 billion in April excluding the reconstruction costs due to the conflict.

Parallel Yemeni Rial (YER) exchange rate to US Dollars hit a sky-high level of YER 300 in May 2016 with a remarkable increase of 20% from March. However official rate has also risen to YER 250 in May.

Oil and gas exports are still interrupted and the foreign exchange reserve at the Yemeni central bank is critically depleting.

Although no information on Consumer Price Index (CPI) has been published since November 2014, the Yemeni Government reported that the inflation is constantly rising1 . These factors are eroding the purchasing power of the Yemeni people1 and their food security.