Yemen Economy

Is Yemen a rich country?

Yemen is a low-income country that faces difficult long-term challenges to stabilizing and growing its economy, and the current conflict has only exacerbated those issues. The ongoing war has halted Yemen’s exports, pressured the currency’s exchange rate, accelerated inflation, severely limited food and fuel imports, and caused widespread damage to infrastructure. The conflict has also created a severe humanitarian crisis - the world’s largest cholera outbreak currently at nearly 1 million cases, more than 7 million people at risk of famine, and more than 80% of the population in need of humanitarian assistance.

Prior to the start of the conflict in 2014, Yemen was highly dependent on declining oil and gas resources for revenue. Oil and gas earnings accounted for roughly 25% of GDP and 65% of government revenue. The Yemeni Government regularly faced annual budget shortfalls and tried to diversify the Yemeni economy through a reform program designed to bolster non-oil sectors of the economy and foreign investment. In July 2014, the government continued reform efforts by eliminating some fuel subsidies and in August 2014, the IMF approved a three-year, $570 million Extended Credit Facility for Yemen.

However, the conflict that began in 2014 stalled these reform efforts and ongoing fighting continues to accelerate the country’s economic decline. In September 2016, President HADI announced the move of the main branch of Central Bank of Yemen from Sanaa to Aden where his government could exert greater control over the central bank’s dwindling resources. Regardless of which group controls the main branch, the central bank system is struggling to function. Yemen’s Central Bank’s foreign reserves, which stood at roughly $5.2 billion prior to the conflict, have declined to negligible amounts. The Central Bank can no longer fully support imports of critical goods or the country’s exchange rate. The country also is facing a growing liquidity crisis and rising inflation. The private sector is hemorrhaging, with almost all businesses making substantial layoffs. Access to food and other critical commodities such as medical equipment is limited across the country due to security issues on the ground. The Social Welfare Fund, a cash transfer program for Yemen’s neediest, is no longer operational and has not made any disbursements since late 2014.

Yemen will require significant international assistance during and after the protracted conflict to stabilize its economy. Long-term challenges include a high population growth rate, high unemployment, declining water resources, and severe food scarcity.

Yemen Economy Data

What is the GDP of Yemen?

Currency Name and Code Yemeni Rial (YER)
GDP - Gross Domestic Product (PPP) $104,000,000,000 (USD)
GDP - official exchange rate $34,930,000,000 (USD)
GDP - real growth rate -28.1%
GDP Per Capita $2,800.00 (USD)
GDP by Sector- agriculture 19%
GDP by Sector- Industry 10.6%
GDP by Sector- services 70.4%
GDP - composition, by end use household consumption: 102.9%

government consumption: 11.7%

investment in fixed capital: 8.9%

investment in inventories: -5.2%

exports of goods and services: 8.5%

imports of goods and services: -26.8%
Population Below Poverty Line 45.2%
Inflation Rate 12.2%
Labor Force 6,832,000
Labor Force by Occupation - note most people are employed in agriculture and herding; services, construction, industry, and commerce account for less than one-fourth of the labor force
Unemployment Rate 35%
Fiscal Year calendar year
Annual Budget $7,581,000,000 (USD)
Budget Surplus or Deficit - percent of GDP -10.3%
Public Debt (% of GDP) 35.9%
Taxes and other revenues - percent of GDP 17.7%
Major Industries crude oil production and petroleum refining; small-scale production of cotton textiles and leather goods; food processing; handicrafts; small aluminum products factory; cement
Industrial Growth Rate 9%
Agriculture Products grain, fruits, vegetables, pulses, qat (mildly narcotic shrub), coffee, cotton; dairy products, livestock (sheep, goats, cattle, camels), poultry; fish
Exchange Rate per US Dollar Yemeni rial (YER)
Child Labor - % of children ages 5-14 23%
Child Labor - # of children ages 5-14 1,334,288
Commercial Bank Prime Lending Rate 22%

Labor Force by Occupation- As reported by Yemen

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