As the holy month of Ramadan approaches, food costs in Yemen remain unaffordable.
- Yemen Watcher Team
- Mar 2
- 2 min read
Yemen 2025: A troubled economy, increasing living costs
Summary:
The deterioration of the Yemeni riyal and the variation in the exchange rate between regions have increased the prices of basic commodities and fuel.
The decline in food and fuel imports, and the impact of unrest in the ports on import operations, have exacerbated the crisis.
The continued decline in the purchasing power of workers, and expectations of rising prices with the advent of Ramadan, require urgent humanitarian interventions.
According to the Food and Agriculture Organization of the United Nations' Market and Trade Bulletin for January 2025, the Yemeni economy faced increasing challenges as a result of the ongoing economic crisis and the decline in the value of the local currency, which was directly reflected in the prices of basic commodities and fuel.
According to the bulletin, Yemeni markets were impacted by the degradation of the Yemeni riyal, with the exchange rate in areas controlled by the Yemeni government reaching 2,300 riyals to the US dollar, a 46% reduction from the previous year. In contrast, the exchange rate in Sana'a-controlled areas remained stable at 530 riyals per dollar. This significant variation in currency value between regions resulted in a visible price gap, with the cost of food goods in government areas rising by 27-6% year on year, while the increase was less in other places.
Fuel costs also vary dramatically, with gasoline prices rising by 14% and diesel by 10% in government districts, while falling by 21% and 6%, respectively, in Sana'a. This instability raised transportation costs, resulting in higher pricing for basic goods.
Although the flow of goods has improved in some sectors, food and fuel imports have fallen overall. Wheat imports plummeted by 50%, while sugar imports decreased by 10%. Diesel imports, on the other hand, soared by 50 percent. Imports have been impacted by problems at northern ports, resulting in cargo delays and increased pricing.
Food prices remained relatively unchanged, except for select products, such as sunflower oil, which increased by 3%. However, the price of the minimum food basket remained high compared to the previous year, putting further strain on low-income households.
Despite minor improvements in temporary workers' earnings, workers' purchasing power has continued to erode due to the high cost of living, with residents of government-controlled areas failing to keep up.
Food and fuel prices are projected to rise much more as Ramadan approaches and the currency continues to deteriorate. It is recommended that humanitarian interventions be increased to secure the provision of essential goods, particularly in areas impacted by food insecurity. Efforts should also be increased to maintain exchange rate stability and encourage imports to relieve economic constraints on citizens.
The January 2025 report highlights Yemen's continuous economic crisis, which requires a swift reaction from actors to alleviate its impact on the most vulnerable individuals.
Comments