A new report issued by the World Bank said that the significant shortfall in foreign exchange in 2021 is due to the slow recovery in oil production and the ability to export, and the decline in financing and humanitarian operations.
In the economic update of Yemen for the month of October, which was briefed by the “Yemeni Scene”, the bank expected that the Yemeni economy would decline by 2% in 2021, driven by the absence of external financing, and the continuation of the Corona pandemic.
The report pointed out that as the conflict continues, the value of the Yemeni riyal continues to decline to new historical levels, and significant increases in food prices have pushed more people into extreme poverty.
The report noted that the escalation of violence and fragmentation of macroeconomic policies add more pressures on the fragile economic conditions.
He expected inflation to accelerate this year, to an estimated 45 percent, compared to 35 percent in 2020.
The report stated that non-oil economic activity was affected by the slowdown caused by the Corona pandemic in trade, double taxation systems in the north and south, scarcity of inputs, and high commodity prices.
The bank’s preliminary estimates indicated that the economy contracted by 8.5% in 2020.