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Middle East and North Africa

Yemen

 Flag of Yemen
Last updated: 03 September 2009

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ECONOMY

Basic Economic Facts

GDP: US$ 28.7 billion
Annual Growth: 4.1% (2002)
Inflation: 10.%
Major Industries: oil, agriculture
Major Trading Partners: India, Saudi Arabia, UAE, France, Thailand, China, South Korea
Aid & Development: The Netherlands, Germany, Japan, EC, USA, UK
Exchange Rate: £1 = 327.82 Rials, US $1 = 160 Rials

Yemen is the poorest country in the Middle East; GDP per capita is less than $1000 per annum, reflecting a weak economy and a rapidly expanding population of over 22 million people. The oil discovered in 1984 has provided most of Yemen's revenue, though production and reserves are modest and economic diversification remains a key priority. The World Bank and the IMF are advising on the restructuring of the economy and the government has been commended for its bold and often domestically unpopular support for the programme of reforms. However, low oil prices in 1998-9 reduced export volumes causing severe economic difficulties for Yemen.

In 2005 there was considerable social unrest throughout Yemen, sparked off by rapidly rising fuel and food prices as subsidies were withdrawn in order to meet IMF targets. The increase in oil prices in 1999/2000 boosted Government revenues and export earnings, but coincided with a significant downturn in tourism due to the poor security situation. Corruption, smuggling and insecurity, along with the growing problem of increased piracy off the coast of Yemen in the Gulf of Aden, have also damaged investor confidence and the economy is not recovering quickly.

International donors from 39 countries and development agencies met in London in November 2006 to agree a package of development support.  Around $4.7 billion was pledged at the conference, to cover a four year period 2007 - 2010.

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