Yemen Monitor/Newsroom:
The Yemeni market in areas controlled by the Houthi group, especially Sana’a, is experiencing a severe recession that has led to a near-complete paralysis of commercial activity. This downturn has caused many businesses to go bankrupt and significantly reduced commercial activity, influenced by a decline in purchasing power and dwindling liquidity.
The impact of this economic stagnation has extended beyond producers and sellers to affect the majority of the population due to its repercussions on the production and operation cycle. The disruption of the monetary cycle and the scarcity of job opportunities have led to a shortage of liquidity and a collapse of purchasing power, causing the recession to expand and include even essential goods.
Even the Eid al-Adha season, which usually sees a boost in sales, has not witnessed any significant improvement. Instead, people’s demand for even essential goods has declined.
Future Outlook and Analysis
According to economist Wafiq Saleh, this economic collapse is a natural result of the Houthi group’s economic policies. Their levies, predatory policies, and the plundering of the public sector and employee salaries have undermined the foundations of a free economy. He anticipates that this will lead to a decline in the private sector’s gross output, reduced productive activity, and increased rates of unemployment and poverty. These developments may indicate a worsening humanitarian crisis in areas under Houthi control.
Saleh explained that the Houthi group’s control over the public sector and the withholding of employee salaries for the ninth consecutive year have significantly exacerbated the crisis. He pointed out that this has intensified suffering and increased rates of poverty and unemployment.
He emphasized that this situation reflects the fragility of the Yemeni economy and its weak resilience to economic shocks, especially in the absence of sound economic policies.
Saleh predicted that this economic recession will continue to negatively impact the Yemeni economy in areas under Houthi control unless urgent measures are taken to address the root causes of this crisis. These measures include reforming economic policies, providing job opportunities, and halting the looting of public resources. Forecasts suggest a worsening humanitarian crisis if the situation remains unchanged.
