IMF Executive Board Concludes 2025 Article IV Consultation with Republic of Yemen
IMF News, April 3, 2026
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Bibliographic details
- Published: April 3, 2026
Context and main messages
- The IMF resumed Article IV consultations with Yemen after an 11-year hiatus; the authorities consented to publication of the Staff Report prepared for the 2025 consultation.
- Yemen faces an acute humanitarian crisis and significant macroeconomic challenges after years of civil conflict.
- Supported by the authorities’ stabilization efforts and external financing, the economy is gradually emerging from the deep recession following the suspension of oil exports in 2022, with the pace of contraction moderating and fiscal and external pressures easing.
- The war in the Middle East is expected to weigh on Yemen’s economy this year; risks to the outlook remain substantial.
Economic developments and outlook
- GDP contracted by 0.5 percent in 2025 after nearly 10 percent contraction in 2023.
- The economy is projected to contract by 0.7 percent in 2026, with recovery beginning from 2027 onward:
- 2026: GDP at constant 2015 prices projected at 0.5 percent growth for 2027, 1.6 percent for 2028, 2.0 percent for 2029, and 2.5 percent for 2030 (see Table 1).
- Inflation (consumer prices, period average) and its path:
- 2023: 17.6
- 2024: 26.6
- 2025: 21.4
- 2026: 26.5
- 2027: 22.4
- 2028: 16.1
- 2029: 14.0
- 2030: 12.7
- Oil production (thousands of barrel per day):
- 2020: 60.0
- 2021: 55.0
- 2022: 46.0
- 2023: 22.0
- 2024: 19.0
- 2025: 19.5
- 2026: 20.0
- 2027: 21.0
- 2028: 23.0
Fiscal developments and public finances
- Directors commended substantial fiscal consolidation achieved since 2022.
- Total revenue (percent of GDP):
- 2020: 11.6
- 2021: 13.9
- 2022: 15.0
- 2023: 20.4
- 2024: 14.7
- 2025: 17.2
- 2026: 17.1
- 2027: 17.7
- 2028: 18.5
- 2029: 18.8
- General government fiscal balances (cash basis and before grants, percent of GDP):
- Fiscal balance (cash basis):
- 2020: -9.5
- 2021: -2.5
- 2022: -5.4
- 2023: -11.4
- 2024: -1.9
- 2025: -3.5
- 2026: -1.2
- 2027: -1.0
- 2028: 0.0
- Fiscal balance (before grants):
- 2020: -9.6
- 2021: -3.6
- 2022: -7.7
- 2023: -14.6
- 2024: -10.5
- 2025: -5.8
- 2026: -5.9
- 2027: -4.8
- 2028: -3.7
- 2029: -3.8
- Total expenditure (percent of GDP):
- 2020: 16.3
- 2021: 27.7
- 2022: 26.4
- 2023: 22.3
- 2024: 18.2
- 2025: 18.4
- 2026: 18.1
External sector, reserves, and exchange rate
- Exports of goods and services (millions USD):
- 2020: 1,256
- 2021: 1,949
- 2022: 2,045
- 2023: 906
- 2024: 921
- 2025: 1,000
- 2026: 1,104
- 2027: 1,218
- 2028: 1,345
- 2029: 1,485
- 2030: 1,639
- Of which hydrocarbons:
- 2020: 764
- 2021: 1,167
- 2022: 1,137
- 2023: 37
- 2024: 0
- Imports of goods and services (millions USD) and percent change:
- Imports levels:
- 2020: 8,374
- 2021: 11,635
- 2022: 9,605
- 2023: 6,077
- 2024: 5,705
- 2025: 4,255
- 2026: 4,733
- 2027: 5,020
- 2028: 5,362
- 2029: 5,740
- 2030: 6,165
- Imports percent change:
- 2020: 0.6
- 2021: 38.9
- 2022: -17.5
- 2023: -36.7
- 2024: -6.1
- 2025: -25.4
- 2026: 11.2
- 2027: 6.1
- 2028: 6.8
- 2029: 7.1
- 2030: 7.4
- Balance of goods and services (millions USD):
- 2020: -7,118
- 2021: -9,687
- 2022: -7,559
- 2023: -5,171
- 2024: -4,784
- 2025: -3,255
- 2026: -3,629
- 2027: -3,802
- 2028: -4,017
- 2029: -4,255
- 2030: -4,525
- Gross foreign reserves (millions of US$):
- 2020: 127
- 2021: 891
- 2022: 704
- 2023: 256
- 2024: 230
- 2025: 142
- 2026: 113
- 2027: 114
- 2028: 156
- 2029: 291
- 2030: 488
- Reserves in months of imports (mem. item): 0.2 in 2020; 0.9 in 2021; 0.4 in 2022 (table entry).
- Exchange rate (YER per US$, average):
- 2020: 743
- 2021: 1028
- 2022: 1115
- 2023: 1355
- 2024: 1818
- 2025: 2109
- 2026: 2618
- 2027: 3156
- 2028: 3612
- 2029: 4054
- 2030: 4495
- Exchange rate (YER per US$, eop) historical entries: 669 (2020), 952 (2021), 1205 (2022), 1518 (2023), 2086 (2024), 1615 (2025).
Social and humanitarian conditions
- The internal conflict caused a marked decrease in income per capita and left over half of the population in urgent need of humanitarian support.
- The crisis has produced widespread food insecurity, disease outbreaks, mass family displacement, and limited access to clean water.
- Reserves barely cover one month of imports—mainly food, energy, and medicines—and budget limits restrict essential services.
Risks and channels of vulnerability
- Domestic and external risks are substantial:
- Spillovers from the recent war in the Middle East could raise global food and fuel prices, disrupt supplies, lower remittances, intensify currency depreciation and inflation, force import compression, and worsen food security and humanitarian conditions.
- Economic precarity could hinder reforms, challenge economic stability and social cohesion.
- Successful peace efforts could accelerate recovery.
- Short-term pressures expected in 2026:
- Rising inflation, weakening private consumption, higher imports, weak export growth, worsening external position, exchange rate strain, and further reserve depletion.
- Prioritization of essential spending may temporarily weigh on the fiscal balance.
Executive Board assessment and policy advice
- Directors agreed with the thrust of the staff appraisal and welcomed resumption of Article IV consultations after more than a decade.
- Key policy recommendations and priorities from Directors:
- Implement prudent policy, strengthen governance, and sequence adjustment and reforms carefully to achieve macroeconomic stability, catalyze donor support, and mitigate risks.
- Continue and deepen IMF engagement guided by the Strategy for Fragile and Conflict‑Affected States, with sustained technical assistance, and secure support from the international community and development partners.
- Enhance domestic revenue mobilization, strengthen tax and customs administration, and improve fiscal governance and public financial management.
- Streamline electricity subsidies and prioritize essential social and development spending to address humanitarian needs and support inclusive growth.
- Engage with creditors to support a comprehensive debt treatment to restore debt sustainability.
- Maintain a prudent monetary stance, limit monetary financing, and continue enhancing central bank independence.
- Adopt and maintain a market‑based exchange rate regime to enhance policy credibility and improve foreign exchange allocation; strengthen the foreign exchange auction framework and address exchange rate misalignments.
- Use the relocation of major banks to Aden as an opportunity to strengthen financial stability and integrity; extend regulation to all deposit‑taking institutions and enhance the AML‑CFT framework to safeguard correspondent banking relationships.
- Pursue comprehensive structural and governance reforms to foster private sector‑led growth, strengthen institutions to address corruption vulnerabilities, enact energy sector reforms, and foster basic public services and infrastructure development.
- Continue improving macroeconomic statistics to support surveillance and policymaking.
Key projections and memorandum items (selected)
- Current account (millions USD):
- 2020: -4,344
- 2021: -5,725
- 2022: -4,512
- 2023: -1,710
- 2024: -860
- 2025: -532
- 2026: -604
- 2027: -572
- 2028: -560
- 2029: -549
- 2030: -550
- Current account (percent of GDP):
- 2020: -40.3
- 2021: -56.1
- 2022: -40.6
- 2023: -18.3
- 2024: -10.7
- 2025: -6.7
- 2026: -8.1
- 2027: -8.0
- 2028: -7.9
- Remittances (millions USD):
- 2020: 1,491
- 2021: 1,578
- 2022: 1,668
- 2023: 1,763
- 2024: 1,862
- 2025: 1,977
- 2026: 2,159
- 2027: 2,364
- 2028: 2,591
- 2029: 2,840
- 2030: 3,110
- Total grants (including deposits) (millions USD):
- 2020: 1,317
- 2021: 2,424
- 2022: 1,436
- 2023: 1,702
- 2024: 2,066
- 2025: 750
- 2026: 870
Source: IMF Press Release: IMF Executive Board Concludes 2025 Article IV Consultation with Republic of Yemen (April 3, 2026); Yemeni Authorities; IMF staff calculations.