Population 30.0 million
GDP 1,043 US$
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  2016 2017 2018 (e) 2019 (f)
GDP growth (%) -13.6 -5.9 -2.6 -3.0
Inflation (yearly average, %) -12.6 24.7 41.8 31.2
Budget balance (% GDP) -9.9 4.7 -10.7 -4.5
Current account balance (% GDP) -5.1 -4.0 -9.3 -8.4
Public debt (% GDP) 68.1 74.5 62.5 48.8

(e): Estimate. (f): Forecast.


  • International humanitarian and financial support
  • Geostrategic importance at the entrance to the Red Sea
  • Architectural and cultural heritage
  • Gas reserves
  • Youthful population


  • Civil war accompanied by a humanitarian and economic crisis and division of the country
  • Poorest country in the Arabian Peninsula
  • Heavily dependent on international aid
  • Poor business environment (bureaucracy, corruption, destroyed or non-existent infrastructure)


A drawn-out war

Four years after the conflict began, Yemen still seems to be at an impasse. The United Nations mediation attempt in June 2018 – which was supposed to allow the Iran-backed Houthi movement to meet with President Abdrabbuh Mansour Hadi's government forces and members of the Saudi Arabian-led coalition for talks at a summit in Geneva – ended in failure. Shortly after this unsuccessful attempt, the temporary ceasefire was broken, and pro-government forces supported by the Saudi coalition resumed their offensive against the rebel-held port of Hodeida. The port city remains one of the only remaining active supply ports in the north-western region, which is the most populated in the country. Since the coalition strikes began, the conflict has become more and more deadly: between March 2015 and June 2018, the United Nations recorded 6,475 victims killed and 10,231 injured. Two million people have been displaced by the clashes, and nearly 17.8 million are food insecure. Soaring prices and increasing shortages put 8.4 million Yemenis at risk of starvation. The Office for the Coordination of Humanitarian Affairs (OCHA) estimates that more than 75% of the population is in an emergency situation. Broken sanitation systems and difficulties in accessing safe drinking water are contributing to the spread of disease. Yemen continues to suffer from the largest cholera outbreak in recent history. In the government-controlled part of the country, the sharp depreciation of the rial has severely undermined household purchasing power, leading to increased protests, including in Taiz. In response to the protests, President Hadi sacked part of the government, including Prime Minister Moeen Abdulmalik Saeed, who took office in October 2018. The escalating violence in Yemen is beginning to attract the attention of the international community. In the United States, a new US Congress resolution is attempting to limit US logistical support for the coalition, despite US President Donald Trump's overt support for his ally. At the same time, a group of experts appointed by the UN Human Rights Council found in an October 2018 report that coalition air strikes against civilian targets were responsible for the majority of casualties. By violating the principles of distinction, proportionality, and precaution, these attacks could be qualified as war crimes. Although it is hard to imagine a swift end to the conflict in the short term, this general awareness could lead the international community to increase the pressure on stakeholders and their allies to sit at the negotiating table.


Activity continues to contract

The worsening conflict and the destruction of infrastructure have damaged the country's economic fabric. Yemen has lost nearly 50% of its GDP since the clashes began. Trade has nosedived and investment is almost non-existent. Hydrocarbon production (40,000 to 45,000 barrels per day), which accounted for 90% of exports in 2015, is expected to continue to decline. Although oil facilities have not been damaged, the transport of production remains constrained by port blockades and pipeline attacks. Severe fuel and electricity shortages will continue to hinder economic activity and fuel inflation. The decline in investment and damage to infrastructure suggest that, even if the conflict were to abate, it will be hard in the short term to get back to pre-civil war production levels.


External and public accounts in a critical state

Despite the sharp contraction in imports, the current account is expected to continue to show a deficit. Low oil revenues are hurting the foreign exchange reserves. Despite Saudi Arabia's deposit of USD 2 billion, they continue to shrink, leading to a sharp depreciation of the rial, which lost 30% of its value in 2018. However, the central bank has little room for manoeuvre, and despite the increase in the key interest rate from 15% to 27% in October 2018, inflation continues to rise. The weakening of the Yemeni currency is driving up import costs, prompting protests in government-controlled territories.

The public accounts situation has deteriorated significantly since the conflict started. Structurally in deficit, the accounts remain highly dependent on oil revenues. The decline in oil exports and the contraction of activity have led to a steep drop in government resources, which are heavily reliant on international aid. In fact, government revenue collection fell from 24% of GDP in 2014 to about 8% of GDP in 2018. Faced with a lack of resources, most essential public services are no longer provided. Civil servants are not being paid and the state is building up additional arrears and unpaid debts. Civil servants have been taking to the streets to demand that the government pay their salaries in US dollars. Meanwhile, humanitarian associations are taking the place of the state in conflictareas.


Last update: February 2019