Republic of Yemen

After years of civil war, Yemen remains one of the world’s most fragile states. Since 2014, the internal conflict has resulted in significant macroeconomic vulnerabilities and a marked decrease in income per capita, leaving over half of the population in need of humanitarian support. The economy entered a deep recession after oil exports halted in 2022, making Yemen an oil importer. The fiscal and external deficits deteriorated sharply at the onset but have since narrowed, driven by compression of government spending and private demand amid high inflation, currency depreciation, and lower real incomes.