Yemen Economic Forecasts, Data & Projections

Yemen Economic Outlook

A war-torn economy in deep crisis:

Yemen’s economy has been devastated by years of conflict, with infrastructure destruction, declining oil production, and widespread humanitarian crises severely limiting economic activity. GDP has contracted significantly since the outbreak of civil war in 2014, and basic economic functions have been severely disrupted. Inflation, food insecurity, and currency instability have made economic recovery extremely difficult.

Oil and aid-dependent revenues:

Before the conflict, oil exports were a primary source of government revenue, but production has sharply declined due to ongoing fighting and infrastructure damage. Yemen now relies heavily on international aid, remittances from Yemenis abroad, and limited domestic trade to sustain its fragile economy. The fragmented governance between different factions further complicates economic management.

Humanitarian crisis and economic collapse:

The country faces one of the world’s worst humanitarian crises, with widespread poverty, famine, and lack of access to basic services. Millions of Yemenis depend on food aid, while currency devaluation has led to skyrocketing prices of essential goods. The conflict has displaced millions, further straining economic recovery efforts.

Yemen’s economic outlook:

Without a political resolution to the conflict, Yemen’s economic situation will remain brittle, with the economy unlikely to recover meaningfully in the near term. Any future stabilization will require massive international investment, reconstruction efforts, and governance reforms. Even with peace, rebuilding infrastructure, reviving oil production, and restoring investor confidence will take years. The country remains in dire need of long-term development aid and structural reforms to rebuild its shattered economy.

Yemen's Macroeconomic Analysis:

Nominal GDP of USD 23.5 billion in 2022.

GDP per capita of USD 706 compared to the global average of USD 10,589.

Average real GDP growth of 6% over the last decade.

Sector Analysis

In 2011, services accounted for 41.8% of overall GDP, manufacturing 8.7%, other industrial activity 44.5%, and agriculture 5.0%. Looking at GDP by expenditure, private consumption accounted for 126.4% of GDP in 2016, government consumption 9.1%, fixed investment 1.7%, and net exports -37.2%.

International trade

In 2019, manufactured products made up 0.6% of total merchandise exports, mineral fuels 0.1%, food 99.3%, ores and metals 0.0% and agricultural raw materials 0.0%, with other categories accounting for 0.0% of the total. In the same period, manufactured products made up 31.4% of total merchandise imports, mineral fuels 28.4%, food 39.1%, ores and metals 0.5% and agricultural raw materials 0.6%, with other goods accounting for 0.0% of the total. Total exports were worth USD 0.20 billion in 2023, while total imports were USD 5 billion.