Years of turmoil in the Middle East have taken their toll on Yemen’s economy. The country is one of the least developed in the world. Inflation and draining foreign currency reserves have pushed Yemen to the edge of breakdown.
A year of airstrikes have blocked the transport system, causing transport costs to soar. A large number of factories have been destroyed. And the ones remaining have halted production due to lack of power and materials. The resulting shortages of domestic commodities have exacerbated inflation.
Last year, exports of oil and natural gas continued to drop, hurting sources of foreign currency. Yemeni economists estimate that overall losses in the war may reach as high as 75 billion US dollars. More than seven million people are suffering chronic hunger, and nearly three million are homeless.
“Yemen’s foreign currency reserves in February dropped to less than 1.8 billion US dollars, compared with over four billion in the same period last year. The inflation rate has reached around 40 percent, comparing with 30 percent in early 2015. I think the inflation rate will reach as high as 75 percent by year end,” said Ahmed Chamakh, economist in Yemeni Central Bank.
“The war has worsened the government’s budget, as well as people’s living standards, education and their health. The domestic situation is at its lowest point. Now, over 22 million people are in urgent need of help and aid from international organizations and other countries,” said Ahmed Chamakh.