IMF Staff Concludes Visit to Yemen

IMF News, January 23, 2025

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The ongoing regional conflict has deepened Yemen’s humanitarian and economic conditions, leading to further contractions in GDP and rising inflation.
Declining aid and disrupted humanitarian operations have left over 17 million people facing food insecurity, widespread malnutrition, and a rise in preventable diseases.
Fiscal and external positions remain under strain: reserves are critically low and arrears continuing to grow.
The significant depreciation of the Yemeni rial amid halted oil exports and limited external financing contributed to contractions in GDP and real incomes in 2024.

Press Release No. 25/015
Date of statement: January 23, 2025
IMF team led by Ms. Esther Pérez Ruiz conducted a mission in Amman, Jordan with the Yemeni authorities from January 19 to 23, 2025.
The mission engaged with international partners to galvanize support and align efforts in support of Yemen.
Media contact: PRESS OFFICER: Wafa Amr; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson

The ongoing political stalemate clouds Yemen’s near-term economic outlook, with the economy still expected to contract in 2025.
The recently announced ceasefire in Gaza has cautiously raised hopes for an easing of regional geopolitical tensions; capitalizing on these developments could improve the outlook.
Key factors weighing on the economy include halted oil exports, limited external financing, currency depreciation, and rising inflation.

Continue to enhance fiscal discipline to create space for necessary capital and social spending.
Unify the currency to reduce economic divisions, simplify trade and finance, and support the resolution of liquidity constraints.
Resume oil exports — oil exports generated more than half of government revenues before their suspension in 2022 — to revive growth, generate revenue, and increase foreign reserves.
Strengthen tax and customs administration to offset revenue shortfalls; efforts in 2024 have helped contain government spending and limit monetary financing of the budget and inflationary pressures.
Prioritize electricity sector reforms to support economic recovery and social needs.
Preserve financial sector stability and facilitate essential capital inflows through enhanced oversight and adherence to international standards, particularly regarding AML/CFT measures.
Implement more consistent and predictable FX auctions to improve efficiency, enhance price discovery, and stabilize the exchange rate.
Enhance data collection and compilation to improve transparency and guide economic policy.

External financing will be essential for maintaining macroeconomic stability, addressing humanitarian needs, and supporting the reform process.
Predictable and consistent financial support would provide the policy space necessary for implementing critical reforms.
The IMF will continue to help Yemen strengthen its policies and institutions and the mission engaged with international partners to galvanize support.

IMF Communications Department — End-of-Mission press release, January 23, 2025.