Yemen Socio-Economic Update, Issue 44 - August 2019 [EN/AR]

Introduction

Yemen is going through the most critical and complicated period of its history. The country faces uncertain future as it is being tossed by tremendous challenges that have diverted it away from the course to the safe port. Under these circumstances, the country has undergone severe economic shocks that dissipated its material and human resources.

To monitor and follow up on the latest developments, this Issue highlights major and current economic developments in Yemen. By the end of 2019, it is estimated that the cumulative contraction in real GDP would reach approximately 45%, while cumulative losses in economic activity (lost opportunity cost) would amount to around $66 billion. Due to the overall financial crisis, banking sector crisis, scarcity of foreign exchange, restrictions on overseas transactions, growing trade deficit and deteriorated investment climate, the value of the national currency further depreciated against the dollar. The exchange rate rebounded again surpassing 600 YR/USD in September 2019. As a result, prices of goods and services went up, and the cost of the minimum food basket increased by approximately 112% between February 2015 and August 2019. This calls for urgent interventions with the emphasis on exerting efforts to restore sustainable peace and building strong, fair and transparent state institutions.