flag Yemen Yemen: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to adress the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Yemen has been involved in a conflict since early 2015. For many years the poorest country in the Middle East and North Africa (MENA), it is now experiencing the world's worst humanitarian crisis. The country is currently divided into two territories: the north and the capital Sana'a are controlled by Houthi rebels; whereas in the south there are two entities, the loyalists guided by the internationally recognised government of President Hadi and the autonomist Southern Transitional Council, led by Aidarous al-Zubaid and supported by Saudi Arabia. Yemen suffers from structural deficiencies and a current conflict that exacerbates the situation. The ongoing war has destroyed the Yemen's economy : it has essentially eliminated the country's exports, weakened the national currency, exacerbated inflation, limited food and fuel imports, and damaged infrastructure. The conflict combined with the COVID-19 pandemic has lead the country into one of the most serious humanitarian crises in the world. Coface estimated that GDP growth was negative by 8.5% in 2020 and by 2% in 2021 as private consumption, by far the main economic component, has constantly weakened because of shortages of basic goods and a steep rise in inflation. Nevertheless, progress in the oil sector should lead the way out of the recession in 2022, with a forecasted growth of 1.5%, despite the depletion of oil fields and the lack of drilling to find new ones.

Since the outbreak of the conflict, Yemen has lost more than half of its GDP. Hydrocarbon production and export were largely suspended, as well as investments. At the same time, low foreign reserves severely reduced Yemen's import capacities, causing a shortage of food, medicine and fuel. The country’s budget deficit was estimated at 5.2% of GDP in 2021 (Coface), with the United States, the European Union and other countries providing a total of USD 600 million in support. This also helped reduce the debt-to-GDP ratio from around 83% in 2020 to 75% in 2021, with the ratio forecasted to decrease to 62% this year (Coface). Public debt also benefited from the repayment facility deployed via the Paris Club debt service suspension initiative. Inflation – at 30% in 2021 – is set to remain high in 2022 (32%), particularly in the south, where monetary deficit financing and military setbacks are contributing to the collapse in the value of the local riyal, which reached its lowest level since the start of the war in July 2021.

The COVID-19 pandemic's fallout has severely affected Yemen's economy, exacerbating the extreme fragility of the population. The country has one of the lowest GDP per capita (PPP) in the world, estimated at USD 1,924 in 2021 by the IMF. Yemen ranks 179th in the UNDP's Human Development Report and 174th out of 180 countries in Transparency International's 2021 Corruption Perceptions Index with a score of 16/100.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 21.89e18.8419.4720.0221.37
GDP (Constant Prices, Annual % Change) 1.4e-8.5-2.01.07.0
GDP per Capita (USD) 692e580585587613
General Government Gross Debt (in % of GDP) 76.584.273.563.153.9
Inflation Rate (%) 12.023.1e63.859.734.0
Current Account (billions USD) -0.85-1.10e-1.71-1.94-2.90
Current Account (in % of GDP) -3.9-5.9e-8.8-9.7-13.6

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Yemeni Rial (YER) - Average Annual Exchange Rate For 1 GHS 53.8649.3946.8694.81132.42

Source: World Bank - Latest available data.

 

Main Sectors of Industry

Agriculture accounted for 24.1% of GDP in 2017. Products included grain, fruits, vegetables, pulses, qat, coffee, cotton, dairy products, livestock, poultry, and fish.

Industry accounted for 14.3% in 2017. It included crude oil production and petroleum refining, small-scale production of cotton textiles, leather goods, food processing, handicrafts, aluminum products, cement, commercial ship repair, and natural gas production.

Services accounted for the remaining 61.6% of GDP in 2017.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 27.5 10.2 62.3
Value Added (in % of GDP) 5.0 35.6 16.8
Value Added (Annual % Change) -2.8 -2.3 -2.8

Source: World Bank - Latest available data.

 

The Active Population in Figures

201820192020
Labour Force 6,561,7776,793,4686,956,391

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 38.97%39.19%39.39%
Men activity rate 71.41%71.84%72.21%
Women activity rate 6.26%6.27%6.29%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
53.7/100
Position:
Mostly Unfree
World Rank:
133/178
Regional Rank:
13/15

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
169/180

Source: World Press Freedom Index, Reporters Without Borders

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Sources of General Economic Information

Main Online Newspapers and Portals
Yemen Newspapers online
Yemen Newspapers and News Sites
Yemen News
BBC Country Profile, Yemen
Useful Resources
Yemen Finance Ministry (in Arabic)
Ministry of Foreign Affairs and Expatriates
Central Bank
 
 

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Latest Update: May 2022