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Yemen has long been one of the poorest countries in the Middle East and North Africa (MENA) and is now one of the world’s worst humanitarian crises. The fighting raging since early 2015 has devastated its economy, leading to severe food insecurity, and destroying critical infrastructure. The UN estimated that 24.1 million people in 2023 were at risk of hunger and disease, and roughly 14 million were in acute need of assistance.

Despite government reforms aimed at stabilizing the Yemeni rial, in 2022, the exchange rate continued to depreciate to historic lows, driving significant increases in food prices and pushing more people into extreme poverty. Socioeconomic conditions have deteriorated rapidly, affected by trade disruptions, severe fuel supply shortages, and reduced humanitarian operations. Growing violence and fragmented macroeconomic policies have further strained fragile economic conditions. An unprecedented humanitarian crisis persists, aggravated by COVID-19 and the global rise in commodity prices, leaving many Yemenis dependent on relief and remittances.

Distortions created by fragmented institutions and diverging rules across control lines have compounded a crisis created by protracted conflict, the interruption of essential services, and rising fuel and food prices. The impact on Yemen's population has been devastating.

Around 18 million Yemenis are without safe water and sanitation. A staggering 16.2 million people require urgent emergency assistance because of food insecurity and even malnutrition. As a result, Yemen has been grappling with recurring outbreaks of preventable diseases such as cholera, diphtheria, measles, and dengue fever. Waves of currency depreciations in 2018 and 2019 created lasting inflationary pressure on the Yemeni riyal, exacerbating the humanitarian crisis. The disruption of infrastructure and financial services has severely affected private sector activity. Many of the more than 40% of Yemeni households that find it difficult to buy even the minimum amount of food have also lost their primary source of income. Poverty worsened even before the crisis, affecting almost half of Yemen’s population of about 29 million. Now it affects 71% to 78% of Yemenis, with women being the most vulnerable.

Prospects for economic improvements in 2023 and beyond will depend on rapid advancements in the political and security situation and on a cessation of hostilities and political reconciliation allowing for a rebuilding of Yemen’s economy and social fabric. Days after the UN announced a two-month truce at the beginning of Ramadan in April 2022, Yemen’s President Abdrabbuh Mansur Hadi transferred authority to a “Presidential Leadership Council” (PLC) following talks sponsored by the Gulf Cooperation Council in Riyadh. The Kingdom of Saudi Arabia and the United Arab Emirates announced an economic package worth US$3 billion and US$300 million in humanitarian support. The economic package can help cover the deficit of the external account, stabilize the exchange rate, and ease upward pressure on prices. However, such one-off windfalls do not eliminate the need for structural reforms.

Last Updated: Mar 21, 2023


of all five-year olds are underweight due to malnourishment in Yemen

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In Depth

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