The World Bank has published its Spring 2026 Yemen Economic Monitor, finding that Yemen’s economy remained under severe strain in 2025 and is expected to contract again in 2026. National real GDP fell by 1.5 percent in 2025 and is projected to decline by a further 0.5 percent in 2026, with persistent structural constraints and external shocks now compounded by spillovers from the conflict in the Middle East. The report says oil exports remain blocked and economic activity continues to be constrained by a difficult business environment, limited access to finance, and weak domestic demand. Humanitarian financing also dropped sharply, with the UN Response Plan funded at 28 percent of needs, down from 56.5 percent in 2024. Fiscal pressure intensified as revenues fell to 5.6 percent of GDP because of lower external grants, reducing room for salary payments, subsidies, and other essential spending. Exchange rate stabilization measures by the Central Bank, alongside external inflows including Saudi financial support, helped the Yemeni rial in Aden appreciate sharply in August 2025 and then stabilize, easing inflation, but the outlook remains fragile as remittances, exports, and aid stay weak. With most essential goods imported, Yemen is also exposed to higher global prices, supply disruptions, and shipping costs. The report estimates that nearly three-quarters of the population live below the poverty line. The World Bank notes that the Internationally Recognized Government has adopted a 2026 reform agenda and a budget aimed at maintaining fiscal discipline. It says the impact of those measures will depend on continued implementation and sustained support from international partners.
World Bank2026-05-21
World Bank says Yemen economy contracted 1.5 percent in 2025 and forecasts a further 0.5 percent decline in 2026
The World Bank’s Spring 2026 Yemen Economic Monitor reports Yemen’s economy remained under severe strain in 2025, with real gross domestic product contracting by 1.5 percent and projected to fall a further 0.5 percent in 2026 amid blocked oil exports, weak demand, and spillovers from the Middle East conflict. Fiscal space narrowed sharply as revenues dropped to 5.6 percent of gross domestic product and humanitarian financing fell, while exchange rate measures and external inflows, including Saudi support, temporarily stabilized the Yemeni rial and eased inflation. Nearly three-quarters of the population live below the poverty line, and the impact of the Internationally Recognized Government’s 2026 reform agenda and budget will hinge on continued implementation and sustained international support.