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Country Report
Yemen
September 2012
Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ United Kingdom
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Yemen 1
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Yemen
Executive summary 3 Highlights
Outlook for 2012-16 4 Political outlook 6 Economic policy outlook 7 Economic forecast
Data and charts 10 Annual data and forecast 11 Quarterly data 12 Monthly data 13 Annual trends charts 14 Monthly trends charts 15 Comparative economic indicators
Country snapshot 16 Basic data 17 Political structure
Editors: Robert Powell (editor); Edward Bell (consulting editor)
Editorial closing date: September 5th 2012
All queries: Tel: (44.20) 7576 8000 E-mail: [email protected]
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2 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
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Yemen 3
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Executive summary
Highlights
September 2012
• The new president, Abdel-Rabbuh Mansour Hadi, has proven surprisingly forceful in imposing his authority since taking office. However, weak central control and his lack of a natural support base will undermine his efforts.
• Mr Hadi and the recently formed government of national unity will embark on plans for a new constitution and competitive elections. However, violence is likely to persist, and the risk of Yemen splitting apart remains high.
• The Gulf Co-operation Council will step up its economic support to Yemen, in order to shore up the country's political transition. However, Western countries' concern will continue to be focused on al-Qaida.
• The new transitional government's main economic priority will be improving Yemenis' quality of life. As a result, the Economist Intelligence Unit does not expect the government to reimpose fiscal austerity until 2013 at the earliest.
• After an estimated contraction in real GDP of over 10% in 2011, we expect a recovery in 2012-13 as private-sector activity picks up. However, growth will slow to 2.1% a year in 2014-16, as Yemen's underlying weaknesses re-emerge.
• We have lowered slightly our forecast for average inflation in 2012, reflecting the sharp decline in qat and foodstuffs prices in the first half of this year.
• We expect the pace of riyal depreciation to accelerate, reaching an average of YR306.4:US$1 in 2016. Foreign reserves, meanwhile, are projected to decline to a mere 1.5 months of import cover by the end of the forecast period.
• The prime minister, Mohammed Salem Basindwa, has called for the abandonment of the political transition deal mediated by the GCC, and Republican Guard troops attempted to storm the Ministry of Defence.
• Around ten police cadets were killed in July after a suicide bomber attacked a police academy in the capital, Sanaa.
• The Friends of Yemen conference has been delayed until late September. The event was postponed on account of the death of the Saudi crown prince, but it may also be the case that Yemen is struggling to prepare for the meeting.
• The government has indicated that top of its priorities for the forthcoming donor conference will be securing funding for a 300-400-mw power plant.
• According to the latest data from the Central Bank of Yemen, consumer price inflation fell in May to 11.2% year on year, as food and beverages prices in particular continued to ease.
• Saudi Arabia has said that it will deposit US$1bn at the Central Bank in order to assist it in stabilising the Yemeni riyal.
Outlook for 2012-16
Review
4 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Outlook for 2012-16 Political outlook
On February 21st Abdel-Rabbuh Mansour Hadi was elected as the new president of Yemen (although his was the only name on the ballot paper). It is intended that Mr Hadi will in effect act as a caretaker, overseeing a two-year interim process during which a new constitution and plans for competitive elections will be drawn up. The carefully choreographed election, which was preceded by the departure of Ali Abdullah Saleh after more than 33 years in power, was a key step in the Gulf Co-operation Council (GCC)-backed transition plan. As part of the plan, and in return for departing the presidency, Mr Saleh has been granted legal immunity. However, it is unclear at this stage whether the inauguration of a new president will allow a more settled picture to emerge. The new interim government, with cabinet posts evenly split between the opposition Joint Meeting Parties (JMP) and the General People's Congress (GPC), will struggle to impose its authority over Yemen's more remote and often self-governing areas. In addition, relations between the JMP (which includes Islah, an offshoot of the Muslim Brotherhood) and the GPC will become increasingly tense, with an emboldened JMP seeking to impose its will on the embattled former ruling party. The future of the Saleh family (several members of which retain senior military positions) will be a key aspect of this internecine struggle, although Mr Hadi has shown surprising boldness thus far in seeking to sideline the family.
Although the transition deal has brought the country back from the brink, large areas of the capital, Sanaa, and further afield have fallen under the sway of tribal, military and in a few places terrorist control. Knitting the already largely anarchic country back together again will be a huge challenge, as will reuniting the armed forces. Meanwhile, the potential for a power struggle between, on the one hand, Mr Saleh, who remains in Sanaa, and his allies (including his son, Ahmed Saleh, who currently heads the Republican Guard) and on the other Mr Hadi is growing. In recent months the new president has removed three of Mr Saleh's relatives from their official positions. But the process has been difficult and painstaking, and tensions within the various branches of the military have occasionally threatened to erupt. For example, in mid-August a unit of the Republican Guard attacked the Ministry of Defence building, and five people were killed in the ensuing battle. However, Mr Hadi can expect the backing of international players, with, for example, the US on May 19th imposing a range of financial sanctions on those individuals "disrupting the political transition"—a stipulation widely viewed as targeting the Saleh family.
As a result, we expect Mr Hadi eventually to triumph in this dangerous power struggle, but much depends on peacefully resolving the future of Ahmed Saleh (who will be difficult to remove by force). Similarly, key opposition players, including the powerful Ahmar family, which heads the Hashid tribal federation, and Ali Mohsen (a general who defected to the opposition), could also seek to hijack the transition process to their advantage, although at this stage they
Political stability
Yemen 5
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
appear to be backing Mr Hadi and the new prime minister, Mohammed Salem Basindwa (who was the JMP's candidate).
With large areas of the capital and elsewhere still divided by armed factions, and the JMP and the GPC struggling to work together, there is a risk that the GCC transition plan will collapse and a violent and messy contest for power will ensue, leaving the pro-democracy campaigners marginalised and the already fragile economy in an even weaker state. As a result, outsiders will remain proactive in mediating between Yemen's opposing factions, but there is a risk that no side will back down and the country will begin to resemble a "failed state".
Outside the capital, meanwhile, the security and economic situation is set to deteriorate further. The contest for power in the capital will consume the energies of the country's leaders, leaving the localities to fend for themselves (and encouraging the secessionist Southern Movement to declare outright independence). Even before the current bout of violence, Yemen faced a range of disparate security and socioeconomic problems, including fast-depleting oil and groundwater reserves. However, international concern will be focused mainly on the prospect that al-Qaida in the Arabian Peninsula (AQAP; comprising the Yemeni and Saudi arms of the group) will exploit the political vacuum to consolidate its presence and step up its activities, both in Yemen and potentially abroad.
The presidential election in February took place within 90 days of the GCC-backed agreement coming into force (a stipulation in line with the current constitution). Despite the fact that Mr Hadi ran unopposed, turnout was relatively high, including in the south, where southern separatists had called for a boycott. With the new president in place, a government of national unity comprising the JMP and the GPC is supposed to oversee a national dialogue process to draw up a new constitution. At the end of this period, new parliamentary and presidential elections will be held, probably in 2013-14, with both likely to be elected for four-year terms. Given the previous dominance of the GPC, the outcome of the polls is extremely uncertain (and Mr Hadi's intentions are particularly opaque); nevertheless, considerable international attention at least will be focused on Islah (the main party within the JMP), which will be looking to replicate the recent electoral success of other fellow Muslim Brotherhood offshoots in the Middle East.
The worsening security situation in Yemen, and the continued tussle for power, has drawn increased attention from the country's neighbours and several Western powers. The initial refusal of Mr Saleh to sign up to the GCC's transition proposal frustrated the international community, and prompted the UN Security Council to pass a resolution calling for the Yemeni president to transfer power immediately. Eventually, faced with growing international opprobrium and with his military's grip on the country slipping, Mr Saleh signed the GCC proposal in late November 2011 in the Saudi capital, Riyadh—highlighting the central role the Saudis have played in Yemen's political maelstrom recently. With Mr Saleh's departure, the GCC states will now no doubt focus on attempting to shore up Yemen's transition, by stepping up
Election watch
International relations
6 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
economic development support and using their influence behind the scenes to shape key players' behaviour. As part of this process, at a Friends of Yemen event in late May, Saudi Arabia pledged US$3.25bn in development aid (and the UAE subsequently pledged US$136m in food aid); a donor conference in September in New York is expected to yield further donations. Although Western countries will also retain an active diplomatic role in Yemen, they will continue to focus mainly on security concerns (in particular AQAP), as was demonstrated by the killing (by a US drone) of a senior al-Qaida figure, Anwar al-Awlaki, in September.
Economic policy outlook
The new government faces a daunting task in reviving the economy. Despite the urgent need to reduce the fiscal deficit, the new government has said that it will prioritise stability over austerity. In keeping with this bias, it has passed an expansionary budget for 2012, which includes 80,000 new jobs in the public sector and higher outlays for fuel subsidies. However, with domestic resources to achieve these goals sorely lacking, it will redouble its efforts to attract substantial foreign aid, with the donor conference scheduled for late September likely to be a key test. The government and the international community alike will seek to earmark donor funds for specific capital projects, with the power sector likely to be the main beneficiary. Yemen has also managed to secure an emergency loan from the IMF, which will be used to support its balance of payments; however, renewing the multifaceted IMF support programme agreed in August 2010, but currently suspended, may have to await the formation of the next government, given the difficulty the current governing coalition would have in meeting the Fund's conditions.
The previous government's fiscal deficit targets, set in conjunction with the IMF, have been abandoned for the time being. The Economist Intelligence Unit estimates that an increase in public-sector wages in early 2011 was more than offset by a rise in oil revenue—the sharp drop in oil output last year largely affected domestic supplies, which are heavily subsidised, rather than exports—resulting in a narrowing of the fiscal deficit to 6.3% of GDP in 2011. With hydrocarbons production still hampered by repeated sabotage (although the Marib pipeline finally reopened in late July, the gas pipeline from Marib to Belhaf on the coast was temporarily put out of action in August), however, and domestic fuel consumption likely to rise as the economy recovers, we expect overall revenue to fall back slightly this year. Indeed, we expect revenue growth to remain depressed for the remainder of the forecast period, as an expected increase in foreign grants, especially from the GCC states, is offset by further falls in oil exports (as oil reserves continue to decline). In terms of expenditure, any major moves to rein in recurrent spending (including the abolition of fuel subsidies) will be deferred, probably until late 2013, given the overarching need to attain political stability. Indeed, with elections due around that time, there is likely to be a considerable amount of slippage in fiscal discipline over the next two years.
Policy trends
Fiscal policy
Yemen 7
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Overall, we expect the fiscal deficit to remain wide over the entire forecast period, at an average of 10% of GDP, as the transitional government remains wedded to an expansionary fiscal policy and any subsequent government struggles to cope with the impact of further declines in oil revenue. Financing these deficits could prove challenging, given the shallowness of the domestic financial sector. The government has thus depended to an extent on the Central Bank of Yemen (CBY) to buy its Treasury bills, but we expect the government to increasingly seek foreign loans (which are typically provided to Yemen at concessionary rates) rather than continuing to rely on domestic sources.
Yemen's financial system is underdeveloped and its economy is largely cash-based. This means that the direct impact of the global financial crisis—and a possible break-up of the euro zone—on the country is limited. It does, however, also reduce the efficacy of interest-rate adjustments, depriving the CBY of an important monetary policy tool. As a result, the CBY's efforts to manage liquidity will remain primarily focused on the issuance of T-bills. Although the CBY has a stated goal of liberalising interest-rate policy, it will be hindered in this by the vulnerability of the Yemeni riyal, and we thus expect interest rates to remain elevated throughout the forecast period, given the likelihood of continued domestic political instability, falling foreign-exchange reserves and the need for the government to issue ever larger amounts of bonds and T-bills.
Economic forecast
2011 2012 2013 2014 2015 2016
Economic growth (%) US GDP 1.7 2.1 1.9 2.2 2.3 2.3
OECD GDP 1.7 1.3 1.7 2.0 2.2 2.2
World GDP 2.6 2.1 2.5 2.9 2.9 3.0
World trade 6.3 3.7 5.1 5.5 5.8 5.9
Inflation indicators (% unless otherwise indicated) US CPI 3.1 2.4 2.3 2.2 2.3 2.3
OECD CPI 2.8 2.4 2.1 2.1 2.1 2.2
Manufactures (measured in US$) 6.8 -0.8 0.3 0.8 0.9 1.3
Oil (Brent; US$/b) 110.9 109.5 103.4 104.5 107.3 110.0
Non-oil commodities (measured in US$) 24.3 -8.6 2.5 -1.4 -1.8 1.3
Financial variables US$ 3-month commercial paper
rate (av; %) 0.2 0.2 0.2 0.3 1.2 2.6
US$:€ (av) 1.39 1.27 1.26 1.25 1.24 1.26
¥:US$ (av) 79.80 80.11 83.59 86.79 88.99 92.24
Our economic forecast is predicated on a central scenario that the political transition will not descend into a violent contest for power. With that in mind, after an estimated contraction in real GDP of over 10% in 2011 (the government has struggled to come up with a precise figure), we expect growth to recover as private-sector activity revives. However, even though the Marib pipeline is operational again, oil production is not expected to bounce back. Although the growth rate this year, forecast to be 3.6%, will be helped by a base effect, following the sharp contraction last year, by end-2012 the real economy is still
Monetary policy
International assumptions
Economic growth
8 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
expected to be smaller than in 2009. In addition, a number of investment projects (including government-funded schemes) have been delayed in the wake of the worsening security situation but would be restarted if sufficient stability returned. The agricultural sector, which has been disrupted by population displacement caused by the violence, is expected to recover over the forecast period, although worsening groundwater shortages will continue to depress output growth.
Although the pace of growth should pick up further in 2013 as donor funding begins to come through (boosting investment, especially in priority sectors such as electricity), the economy will slow again in 2014, as the country's underlying economic weaknesses—including steadily declining oil output, an undeveloped financial sector and an undereducated labour force—reassert their influence. This pattern will persist over the remainder of the forecast period, as projected oil output dips to just 129,000 barrels/day in 2016 (less than half its level in 2010). Overall, we forecast that real GDP growth will slow from an annual average rate of 3.9% in 2012-13 to just 2.1% in 2014-16—below the rate of population growth.
Economic growth % 2011a 2012b 2013 b 2014 b 2015b 2016b
GDP -10.5 3.6 4.1 2.1 1.9 2.3
Private consumption -7.0 4.7 5.2 5.9 6.0 5.7
Government consumption -1.5 4.5 2.0 1.8 1.0 2.0
Gross fixed investment -15.0 6.0 8.0 7.0 6.7 6.7
Exports of goods & services -6.3 0.7 2.0 -5.1 -6.0 -5.6
Imports of goods & services -1.8 5.1 6.0 5.6 5.7 5.7
Domestic demand -8.3 5.2 5.5 5.6 5.5 5.5
Agriculture -6.6 2.7 1.6 1.5 1.2 1.0
Industry -8.0 5.9 1.8 1.3 0.8 1.3
Services -8.2 6.1 4.0 4.1 4.2 4.5
a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.
Inflation rose to an average of 19.5% in 2011, reflecting fuel price rises and shortages of basic foodstuffs. However, the recent improvement in the security situation has helped to ease supply bottlenecks, and inflation halved in the first five months of the year. Assuming the worst of the shortages are over, and with global commodity prices falling, inflation should return to close to its trend rate in 2012-13, averaging 11.1% (slightly below our previous forecast, reflecting the sharp decline in qat and foodstuffs prices in the first half of this year). Nonetheless, with the depreciation of the riyal expected to accelerate in the second half of the forecast period, pushing up import costs, we expect average inflation to reach 13.3% in 2016.
In the wake of the unrest that began in early 2011, the riyal came under severe downward pressure, forcing the CBY to run down its reserves to protect the currency. In response, the CBY kept the official rate steady at YR213.8:US$1, leading to a wide gap with the unofficial, black-market rate. However, this gap has narrowed recently, and the Central Bank in August began to allow a small weakening of the official rate—seemingly a signal of confidence, given that foreign reserves have recovered recently and the IMF and Saudi Arabia have
Inflation
Exchange rates
Yemen 9
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
stepped in to provide financial support. However, with the external account set to return widening deficits over the forecast period, we expect Yemen to be forced to run down its foreign reserves to alarmingly low levels, reaching the equivalent of just 1.5 months of import cover by the end of the forecast period (although this is slightly above our previous forecast after Saudi Arabia in September said that it would deposit US$1bn at the Central Bank). As a result, the CBY will be less able to protect the riyal, resulting in an accelerated depreciation of the currency, to an average of YR306.4:US$1 in 2016. However, a free float of the currency is also a possibility, if the CBY chooses to protect its foreign-currency reserves at the expense of the riyal.
The current account is expected to return widening deficits in 2012-16. Export earnings remained surprisingly resilient in 2011, as oil production outages almost entirely affected domestic supplies (rather than exports). We expect export earnings to decline in 2012, however, as both oil production and, increasingly, LNG exports are affected by sabotage, and, after a modest rebound in 2013, to fall back steadily over the remainder of the forecast period as oil production continues its long-term declining trend. As a result, the trade deficit is forecast to widen to US$5.4bn (9.3% of GDP) in 2016. With Yemen confronting a potentially urgent balance-of-payments crisis, we expect foreign donors to step up their support (and GCC states to allow more Yemenis into their labour forces), which will push up current transfers inflows and move the non-merchandise account into surplus from 2014. However, this will be insufficient to offset the widening trade deficit, and thus we expect the current-account shortfall to widen substantially from US$1.7bn (4.4% of GDP) in 2011 to US$4.1bn (7.1% of GDP) in 2016.
Forecast summary (% unless otherwise indicated)
2011a 2012b 2013 b 2014 b 2015b 2016b
Real GDP growth -10.5c 3.6 4.1 2.1 1.9 2.3
Oil production ('000 b/d) 198c 191 206 178 152 129
Crude oil exports (US$ m) 6,071c 4,889 4,588 3,376 2,175 1,286
Consumer price inflation (av) 19.5 11.4 10.8 11.7 12.6 13.3
Deposit rate 20.0 20.0 18.0 18.0 18.0 18.5
Government balance (% of GDP) -6.3c -10.2 -9.9 -10.3 -10.2 -9.5
Exports of goods fob (US$ bn) 8.7 8.0 8.1 7.2 6.3 5.8
Imports of goods fob (US$ bn) 8.2 8.9 9.4 9.9 10.5 11.2
Current-account balance (US$ bn) -1.7 -2.2 -2.0 -2.5 -3.3 -4.1
Current-account balance (% of GDP) -4.4c -5.1 -4.4 -5.2 -6.3 -7.1
External debt (end-period; US$ bn) 6.3c 6.7 7.2 7.7 8.1 8.4
Exchange rate YR:US$ (av) 213.8 215.6 239.8 258.3 281.3 306.4
Exchange rate YR:US$ (end-period) 213.8 225.0 247.0 270.0 290.0 322.0
Exchange rate YR:¥100 (av) 267.9 269.1 286.8 297.6 316.1 332.2
Exchange rate YR:€ (av) 297.5 274.6 302.7 323.6 348.2 386.1
a Actual. b Economist Intelligence Unit forecasts. c Economist Intelligence Unit estimates.
External sector
10 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Data and charts Annual data and forecast
Please see graphic below
2007a 2008a 2009a 2010a 2011 b 2012c 2013c
GDP
Nominal GDP (US$ m) 25,858 31,052 29,922 32,632b 38,124 42,903 45,026
Nominal GDP (YR m) 5,144,567 6,203,041 6,069,599 7,165,666b 8,150,813 9,250,228 10,795,103
Real GDP growth (%) 3.5b 3.2b 3.8b 6.2b -10.5 3.6 4.1
Expenditure on GDP (% real change)
Private consumption 4.4b 3.4b 2.9b 3.3b -7.0 4.7 5.2
Government consumption 7.0b 7.0b -1.3b 0.9b -1.5 4.5 2.0
Gross fixed investment 9.5b 7.4b -2.2b -3.7b -15.0 6.0 8.0
Exports of goods & services -3.0b -2.4b 6.8b 16.5b -6.3 0.7 2.0
Imports of goods & services 5.8b 4.6b -1.3b 0.4b -1.8 5.1 6.0
Origin of GDP (% real change)
Agriculture 1.5b 2.2b -1.0b 2.0b -6.6 2.7 1.6
Industry 4.1b 2.8b 5.8b 9.0b -8.0 5.9 1.8
Services 4.0b 4.0b 3.5b 3.8b -8.2 6.1 4.0
Population and income
Population (m) 22.0 22.6 23.3 24.1b 24.8 25.4 26.2
GDP per head (US$ at PPP) 2,712b 2,776b 2,826b 2,945b 2,611 2,685 2,776
Fiscal indicators (% of GDP)
Central government budget revenue 27.8 32.1 21.5 24.8b 21.3 17.8 16.4
Central government budget expenditure 33.7 35.8 30.0 28.6b 27.7 28.0 26.3
Central government budget balance -5.9 -3.7 -8.5 -3.8b -6.3 -10.2 -9.9
Public debt 28.2 26.5 35.5 35.8b 36.9 42.5 47.6
Prices and financial indicators
Exchange rate YR:US$ (av) 198.95 199.76 202.85 219.59 213.80 a 215.61 239.75
Exchange rate YR:US$ (end-period) 199.54 200.08 207.32 213.80 213.80 a 225.00 247.00
Consumer prices (av; %) 7.9 19.0 5.4 11.2 19.5 a 11.4 10.8
Stock of money M1 (% change) 9.9 10.8 11.5 3.7 26.2 a 10.3 11.9
Stock of money M2 (% change) 17.0 13.2 12.8 11.8 0.4 a 9.6 14.8
Lending interest rate (av; %) 18.0 18.0 18.0 25.0 25.0 a 25.0 23.0
Current account (US$ m)
Trade balance -441 -357 -2,013 -1,051 414 a -935 -1,297
Goods: exports fob 7,050 8,977 5,855 7,650 8,662 a 7,958 8,083
Goods: imports fob -7,490 -9,334 -7,868 -8,701 -8,248 a -8,893 -9,380
Services balance -1,143 -1,142 -896 -737 -1,025 a -1,211 -1,255
Income balance -1,350 -1,915 -1,171 -1,717 -2,552 a -2,290 -2,289
Current transfers balance 1,426 2,163 1,515 1,780 1,500 a 2,246 2,840
Current-account balance -1,508 -1,251 -2,565 -1,725 -1,663 a -2,190 -2,001
External debt (US$ m)
Debt stock 6,107 6,274 6,370 6,324 6,314 6,726 7,169
Debt service paid 272 285 265 263 284 273 296
Principal repayments 199 206 184 182 187 167 178
Interest 72 79 79 78 97 106 118
International reserves (US$ m)
Total international reserves 7,759 8,157 6,993 5,942 4,531 a 4,700 4,208
a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.
Source: IMF, International Financial Statistics.
Yemen 11
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Quarterly data Please see graphic below
2010 2011 2012
2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr
Prices
Consumer prices (av; 2005=100) 114.0 118.1 122.7 127.2 133.5 144.2 152.2 149.7
Consumer prices (% change, year on year) 10.6 12.0 13.6 14.4 17.1 22.1 24.0 17.7
Financial indicators
Exchange rate YR:US$ (av) 225.14 225.53 214.05 213.80 213.80 213.80 213.80 213.80
Exchange rate YR:US$ (end-period) 225.96 214.60 213.80 213.80 213.80 213.80 213.80 213.80
Deposit rate (av; %) 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
Lending rate (av; %) 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0
Treasury bills, 3-month rate (av; %) 23.0 23.0 23.0 23.0 23.0 23.0 22.6 n/a
M1 (end-period; YR bn) 738.1 761.3 786.6 832.8 909.8 955.5 993.0 977.6
M1 (% change, year on year) 5.9 -0.4 3.7 13.8 23.2 25.5 26.2 17.4
M2 (end-period; YR bn) 2,075.7 2,088.1 2,165.7 2,065.7 2,075.0 2,114.4 2,174.4 2,248.2
M2 (% change, year on year) 16.0 10.0 11.8 1.8 0.0 1.3 0.4 8.8
Sectoral trends (Crude oil)
Production (m barrels/day) 0.27 0.26 0.25 0.25 0.17 0.21 0.14 n/a
Prices, Brent (US$/barrel) 78.69 76.41 86.80 104.90 117.10 112.47 109.29 n/a
Foreign trade & payments (US$ m)
Reserves excl gold (end-period) 5,792.0 5,987.0 5,868.0 5,274.0 4,686.0 4,720.0 4,449.0 4,725.0
Sources: IMF, International Financial Statistics; Central Bank of Yemen; International Energy Agency, Oil Market Report; Platts.
12 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Monthly data Please see graphic below
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Exchange rate YR:US$ (av) 2010 209.10 213.90 217.90 224.04 225.56 225.82 229.97 231.78 214.85 214.40 213.91 213.83
2011 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80
2012 213.80 213.80 213.80 213.80 213.80 213.80 n/a n/a n/a n/a n/a n/a
Exchange rate YR:US$ (end-period) 2010 212.30 215.20 222.30 225.32 225.64 225.96 239.68 214.90 214.60 214.10 213.90 213.80
2011 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80 213.80
2012 213.80 213.80 213.80 213.80 213.80 213.80 n/a n/a n/a n/a n/a n/a
M1 (% change, year on year) 2010 4.2 10.5 7.1 5.3 3.7 5.9 7.1 7.9 -0.4 4.3 3.2 3.7
2011 7.6 4.4 13.8 16.1 23.2 23.2 30.3 27.9 25.5 26.5 23.8 26.2
2012 25.0 30.5 17.4 13.1 16.3 n/a n/a n/a n/a n/a n/a n/a
M2 (% change, year on year) 2010 10.8 13.8 16.2 15.6 15.2 16.0 19.3 13.6 10.0 11.7 11.6 11.8
2011 12.8 8.4 1.8 0.5 0.3 0.0 -0.2 3.2 1.3 2.1 0.8 0.4
2012 -0.1 5.4 8.8 8.4 12.6 n/a n/a n/a n/a n/a n/a n/a
Deposit rate (av; %) 2010 12.0 12.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
2011 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
2012 20.0 20.0 20.0 20.0 20.0 n/a n/a n/a n/a n/a n/a n/a
Lending rate (av; %) 2010 18.0 18.0 18.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0
2011 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0
2012 25.0 25.0 25.0 25.0 25.0 n/a n/a n/a n/a n/a n/a n/a
Foreign-exchange reserves excl gold (US$ m) 2010 6,498 6,356 6,119 6,067 5,845 5,792 5,673 5,821 5,987 5,919 5,658 5,868
2011 5,881 5,906 5,274 5,076 4,782 4,686 4,763 4,676 4,720 4,754 4,517 4,449
2012 4,604 4,677 4,725 4,725 4,557 n/a n/a n/a n/a n/a n/a n/a
Sources: IMF, International Financial Statistics; Haver Analytics.
Yemen 13
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Annual trends charts Please see graphic below
Annual trends charts
Source: Economist Intelligence Unit. Source: Economist Intelligence Unit.
Budget balance (% of GDP)
Current-account balance (% of GDP)
Source: Economist Intelligence Unit. Source: Economist Intelligence Unit.
Source: Economist Intelligence Unit. Source: Economist Intelligence Unit.
Real GDP growth(% change)
Consumer price inflation(av; %)
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0 World Middle East and North Africa Yemen
13121110090820070.0
5.0
10.0
15.0
20.0
25.0 World Middle East and North Africa Yemen
1312111009082007
-15.0
-10.0
-5.0
0.0
5.0
10.0 Middle East and North Africa Yemen
1312111009082007-10.0
-5.0
0.0
5.0
10.0
15.0 Middle East and North Africa Yemen
1312111009082007
Destination of exports, 2011 Origin of imports, 2011 (share of total) (share of total)
India10.9%
Others34.1%
South Korea9.8%
China27.3%
Thailand12.4%
Japan5.6%
Kuwait6.5%
Others48.2%
India6.4%
UAE18.5%
China11.6%
Saudi Arabia8.7%
14 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Monthly trends charts Please see graphic below
Monthly trends charts
Exchange rate (YR:US$; av)
Consumer price inflation (% change, year on year)
Monetary aggregates (% change, year on year)
Foreign-exchange reserves(US$ m)
Source: Economist Intelligence Unit.Source: Economist Intelligence Unit.
Source: Economist Intelligence Unit.Source: Economist Intelligence Unit.
4,000
5,000
6,000
7,000
8,000
9,000
AprJan12
OctJulAprJan11
OctJulAprJan10
OctJulAprJan2009
0.0
5.0
10.0
15.0
20.0
25.0
30.0
AprJan12
OctJulAprJan11
OctJulAprJan10
OctJulAprJan2009
195
200
205
210
215
220
225
230
235
AprJan12
OctJulAprJan11
OctJulAprJan10
OctJulAprJan2009
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0 M2 M1
AprJan12
OctJulAprJan11
OctJulAprJan10
OctJulAprJan2009
Yemen 15
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Comparative economic indicators Please see graphic below
Comparative economic indicators, 2011
Gross domestic product(US$ bn; market exchange rates)
Gross domestic product(% change, year on year)
Consumer prices(% change, year on year)
Sources: Economist Intelligence Unit estimates; national sources.
Sources: Economist Intelligence Unit estimates; national sources.Sources: Economist Intelligence Unit estimates; national sources.
Sources: Economist Intelligence Unit estimates; national sources.
Gross domestic product per head(US$ '000; market exchange rates)
0 100 200 300 400 500 600
Bahrain
Jordan
Yemen
Lebanon
Tunisia
Syria
Libya
Sudan
Oman
Morocco
Iraq
Kuwait
Qatar
Algeria
Egypt
Israel
United Arab Emirates
Iran
Saudi Arabia
0 20 40 60 80 100 120
Yemen
Sudan
Syria
Egypt
Morocco
Tunisia
Jordan
Iraq
Algeria
Iran
Lebanon
Libya
Bahrain
Saudi Arabia
Oman
Israel
Kuwait
United Arab Emirates
Qatar
-5.0 0.0 5.0 10.0 15.0 20.0 25.0
Bahrain
United Arab Emirates
Morocco
Qatar
Israel
Tunisia
Oman
Jordan
Algeria
Kuwait
Syria
Saudi Arabia
Lebanon
Iraq
Egypt
Libya
Sudan
Yemen
Iran
-5.0 0.0 5.0 10.0 15.0
Libya
Yemen
Syria
Tunisia
Lebanon
Iran
Egypt
Bahrain
Algeria
Jordan
Sudan
United Arab Emirates
Israel
Morocco
Oman
Saudi Arabia
Iraq
Kuwait
Qatar
-10.5
-27.9
16 Yemen
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Country snapshot
Basic data
527,968 sq km
24.3m (IMF, mid-2010 estimate)
Population in '000 (2004 census)
Taiz 2,403 Hajjah 1,481 Ibb 2,138 Dhamar 1,339 Hodeida 2,161 Hadramawt 1,029 Sanaa city (capital) 1,748 Sanaa (province) 918
Northern and central highlands: warm in summer but cold in winter; Tihama and southern coast including Aden: hot; eastern plains and desert: hot, arid and harsh
Arabic (official); English is also used in official and business circles
Predominantly metric in the northern provinces and UK (imperial) in the south; local measures are also in use
Yemeni riyal (YR) = 100 fils. The riyal was floated on the open market in July 1996
3 hours ahead of GMT
The dates of Islamic holidays are based on the lunar calendar and are therefore approximate. New Year's Day (January 1st); Mawlid al-Nabi (the birthday of the Prophet; February 4th 2012); Labour Day (May 1st); Unity Day (May 22nd); Revolution Day (September 26th); Eid al-Fitr (end of Ramadan; August 19th 2012); National Day (October 14th); Independence Day (November 30th); Eid al-Adha (Feast of the Sacrifice; October 26th 2012); Islamic New Year (November 15th 2012)
Land area
Population
Languages
Measures
Currency
Time
Main towns and provinces
Climate
Public holidays
Yemen 17
Country Report September 2012 www.eiu.com © The Economist Intelligence Unit Limited 2012
Political structure
Republic of Yemen
Republic, unified on May 22nd 1990
Under the constitution of May 1991, sharia (Islamic law) is the principal source of law
Unicameral assembly directly elected for a six-year term
February 21st 2012 (presidential); April 2003 (parliamentary). Next parliamentary election had been scheduled for April 2009 but was postponed. Next presidential election had been scheduled for 2013, but, under the new transition agreement signed by the president, Ali Abdullah Saleh, in November, it was held in February. The next parliamentary election may have to await the conclusion of the drawing-up of a new constitution, planned to take two years
President (directly elected for a two-year term): Abdel-Rabbuh Mansour Hadi. Mr Hadi will in effect act as a caretaker president until a multi-candidate election takes place in 2014
Council of Ministers headed by the prime minister. In December 2011 a new cabinet was announced, roughly split between the General People's Congress (GPC, the former ruling party) and the opposition
There are 22 legal parties, five of which are represented in parliament: the GPC; the Yemeni Congregation for Reform (Islah, a religious-based party with tribal and Islamist wings); the Arab Socialist Baath Party; the Yemeni Socialist Party (YSP); and the Nasserist Unionist Party (NUP). These, together with two opposition groups without parliamentary representation, the Union of Public Forces and al-Haq, form a loose parliamentary coalition, the Joint Meeting Parties (JMP)
Prime minister Mohammed Salem Basindwa (JMP)
Agriculture & irrigation Farid Ahmed Mujawar (GPC) Defence Mohammed Nasser Ahmed Ali (GPC) Education Abdul-Razzaq Yahya al-Ashwal (JMP) Electricity Saleh Hasan Sumai (JMP) Endowment & Islamic affairs Hamoud Ubad (GPC) Finance Sakhr Ahmed al-Wajih (JMP) Foreign affairs & immigration Abu Bakr Abdullah al-Qirbi (GPC) Human rights Houriah Ahmed Mashhour (JMP) Information Ali Ahmed al-Amrani (JMP) Interior Abdul-Qader Qahtan (JMP) Justice Murshed Ali al-Arashani (JMP) Labour & social affairs Armat al-Razzaq Hummad (GPC) Local administration Ali Mohammed al-Yazidi (JMP) Oil & minerals Hisham Sharaf (GPC) Planning & international co-operation Mohammed al-Saadi (JMP) Public health & population Ahmed Qassim al-Ansi (GPC) Public works & roads Omar Abdullah al-Qurshumi (GPC) Trade & industry Saad al-Din Ali bin Talib (JMP) Transport Waid Abdullah Bathib (JMP) Water & environment Abdo Razzaz Saleh Khaled (JMP)
Mohammed Awadh bin Hamam
Legal system
Executive
Political parties
Government
Form of state
National elections
Legislature
Head of state
Key ministers
Central Bank governor
Official name