Economic Reform in Yemen: IMF Calls for Urgent Reforms to Achieve Economic Stability
- Yemen Watcher Team
- Feb 11
- 2 min read
Summary:
Yemen is facing a serious economic and humanitarian crisis, with more than 17 million people suffering from food insecurity and malnutrition, with diseases spreading and the macroeconomic situation continuing to deteriorate.
The IMF mission chief called for urgent action to achieve economic stability, with a focus on unifying the currency, resuming oil exports, and reforming the electricity sector.
The IMF mission chief stressed the importance of continued international assistance to Yemen and called on the international community to provide sustainable and predictable financial support to enable Yemen to implement necessary reforms.
The International Monetary Fund has warned that Yemen's economic and humanitarian situation is deteriorating, aggravated by the Middle East conflict and dwindling international help. At the end of an IMF mission to Jordan, the mission's head, Ms. Esther Perez Ruiz, called for immediate action to implement economic reform in Yemen, prevent economic deterioration, and achieve the required stability.
According to Perez Ruiz, more than 17 million Yemenis suffer from food instability and malnutrition, and preventable diseases are spreading. The economy has continued to deteriorate, with GDP dropping and inflation soaring. Both the governmental budget and foreign assets are under tremendous stress, with reserves approaching catastrophic levels.
Under these tough circumstances, Perez Ruiz emphasized the Yemeni authorities' commitment to maintaining macroeconomic stability and implementing structural reforms. She stated that while progress has been achieved in controlling governmental spending, more work is needed to enhance tax and customs administration.
Perez Ruiz voiced cautious hope about the future despite the major obstacles, pointing out that the current truce in Gaza may reduce geopolitical tensions in the area. She urged taking advantage of this chance to restart internal Yemeni talks to bring about enduring peace, emphasizing that doing so will enhance Yemen's economic prospects in conjunction with ongoing policy reform.
Currency unification is on the Fund's list of goals for Yemen's next phase. Perez Ruiz believed that currency unification was crucial to lowering economic differences and facilitating commerce and financing. She also emphasized how crucial it is to resume oil exports, which were a significant source of funding for the government prior to their suspension in 2022. Ruiz also urged that overhauling the power industry, which has long-standing issues and burdens the national economy, be given priority. To increase openness and direct future economic policy, she emphasized the necessity of fortifying the data collection and preparation process.
According to Perez Ruiz, foreign assistance is essential to addressing Yemen's development and humanitarian concerns. She urged the international community to give Yemen steady and predictable financial assistance to carry out the required reforms. She emphasized that Yemen will continue to receive assistance from the International Monetary Fund to fortify its institutions and policies.
Perez Ruiz emphasized that the Fund looks forward to continuing to engage closely with the Yemeni government and all stakeholders, thanking them for their cooperation and candid conversations during the mission.
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