## IMF Staff Concludes Visit on Yemen

_IMF News, December 13, 2018_

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**Canonical URL:** [IMF Staff Concludes Visit on Yemen](https://www.imf.org/en/news/articles/2018/12/13/pr18475imf-staff-concludes-visit-on-yemen)

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## Bibliographic details
- Published: December 13, 2018

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### Mission context and observations
- An IMF team led by Albert Jaeger visited Amman from December 5-12, 2018 to discuss recent developments and economic measures to mitigate the humanitarian crisis in 2019.
- “Almost four years of armed conflict have severely weakened Yemen’s economy.”
- Hydrocarbon exports are “largely suspended,” and a “shortage of foreign exchange continued to compress the availability of basic imports—foremost food, fuel, and medicines.”
- The population’s purchasing power has been “crippled,” driven by the conflict’s adverse impact on economic activity and high inflation.
- Stepped up humanitarian aid has “so far forestalled outright famine conditions,” but “aid agencies are warning that the humanitarian crisis remains at a tipping point.”

### Immediate measures to mitigate the humanitarian crisis
- Agreement that better economic policies supported by increased donor grants could “appreciably contribute to mitigating the humanitarian crisis in the short run.”
- Increased donor grants would:
  - “help relax the shortage of foreign exchange that compresses basic imports.”
  - When channeled through the Central Bank of Yemen (CBY), provide foreign exchange resources for essential food imports.
  - Provide “a sterilization tool to help stabilize the exchange rate and reduce inflation.”
- The package of economic measures discussed is characterized as a “stopgap solution mitigating the humanitarian crisis in the short run.”
- Restoring sustainability “beyond 2019 will require additional economic stabilization efforts.”

### Fiscal and institutional recommendations
- The Yemeni Government needs to:
  - “step up efforts to control and rationalize its spending, especially on the public wage bill.”
  - “improve revenue collections.”
- “Strengthening the transparency of the Government’s fiscal operations, including by publishing regular reports on budgetary developments, could help catalyze more donor support.”
- “Reducing the fragmentation of Yemen’s policy making institutions would help alleviate the humanitarian crisis.”
  - “Reversing the fragmentation of the central bank system would facilitate pooling of fiscal revenue across governorates and paying civil service salaries and transfers in all of Yemen.”
  - “Resuming full payment of civil service salaries would also help restore public services, including health and basic education services, to pre-conflict levels.”
- There is a need to follow up on recommendations of a report by the recent IMF technical assistance mission on how to improve the capacity of the central bank system.

### Follow-up and timeline
- “The IMF team and the authorities agreed to review economic and policy developments again in about three months.”
- The mission “will not result in a Board discussion.”
- Views expressed are those of IMF staff and “do not necessarily represent the views of the IMF’s Executive Board.”

*Press Release No. 18/475, December 13, 2018.*

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## References

- [Republic of Yemen and the IMF](http://www.imf.org/external/country/YEM/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2018/12/13/pr18475imf-staff-concludes-visit-on-yemen_