The International Monetary Fund (IMF) mission expected that Yemen would achieve a modest economic growth of about two percent this year and 3.2 percent in 2023.
However, the Fund called for more reforms, especially with regard to the customs dollar rate, support for the electricity sector, transparency in financial management, and accountability in the use of scarce financial resources.
The announcement came at the end of a visit by an IMF team, headed by Brett Rayner, to Jordan, that met with representatives of the Yemeni government, from Sept. 27 to Oct. 6.
Discussions covered recent economic developments in Yemen, the outlook, and progress on key reforms, a statement read.
“Higher global commodity prices have compounded inflationary pressures and exacerbated food insecurity. Annual inflation in August was estimated at around 45 percent, with food inflation at around 58 percent. Yemen has also faced a decline in wheat import volumes and has been unable to fully substitute for imports from Russia and Ukraine, which constituted around 40 percent of Yemen’s wheat,” the statement quoted Rayner as saying.
The IMF warned that humanitarian assistance continued to fall short of Yemen’s needs, saying: “As a result, food insecurity is on the rise with the UN projecting the number of people in need of humanitarian assistance to reach 23.4 million by end-2022, with 19 million facing acute food insecurity.”
On the other hand, the IMF pointed to “some encouraging developments” that have paved the way to greater macroeconomic stability.
“In particular, the truce has supported a period of relative calm, including reduced conflict casualties and greater exchange rate stability,” the statement underlined.
It continued: “Looking ahead, a more stable exchange rate and the recent decline in global food prices are expected to translate into lower inflation towards the end of the year. Economic output is expected to broadly stabilize with modest economic growth of around 2 percent in 2022 and 3.2 percent in 2023, albeit with considerable uncertainty regarding the evolution of the conflict and availability of external financing.”