World Bank: Yemen Faces Severe Economic Crisis and Rising Inflation Amid Declining Aid and Institutional Division
Yemen Monitor / Newsroom:
The World Bank has warned in a recent report of the continued economic and social deterioration in Yemen, driven by the ongoing conflict, institutional fragmentation, and a sharp decline in international aid.
The report stated that Yemen’s real GDP per capita has dropped by approximately 58% over the past decade of war. Meanwhile, inflation has exceeded 30% in government-controlled areas, and the Yemeni rial has experienced a severe devaluation, further worsening the cost-of-living crisis.
It highlighted that the division between monetary authorities in Sana’a and Aden, along with differing exchange rates, is widening the economic gap and weakening the state’s ability to implement unified economic policies.
The report also noted that the Houthi-imposed blockade on oil exports has significantly reduced government revenues, while security tensions in the Red Sea have increased shipping costs and slowed trade movement.
The World Bank forecasts that Yemen’s economy will contract by 1.5% in 2025, with nominal GDP per capita projected to decline by 19%, due to currency collapse, reduced external aid, and ongoing liquidity and fuel crises.
