The International Monetary Fund’s Executive Board concluded the 2025 Article IV consultation with Yemen and published the related staff report with the authorities’ consent, resuming surveillance after an 11-year hiatus linked to the conflict and gaps in economic data. The Board pointed to tentative signs of stabilization but stressed that macroeconomic conditions and the humanitarian situation remain fragile, with very low reserves and tight budget constraints limiting essential services. Real GDP contracted by 0.5% in 2025 and staff projections envisage a further 0.7% contraction in 2026 amid rising inflation and weaker private consumption, while higher imports and weak export growth are expected to worsen the external position and put additional pressure on the exchange rate and reserves. Executive Directors welcomed fiscal consolidation since 2022 and supported the authorities’ fiscal reform plan focused on domestic revenue mobilization, stronger tax and customs administration, and improved fiscal governance and public financial management, alongside electricity subsidy streamlining and prioritisation of essential spending. They encouraged a prudent monetary stance that limits monetary financing and further strengthens central bank independence, backed by a market-based exchange rate regime, a strengthened foreign exchange auction framework, and action on emerging misalignments; they also highlighted the relocation of major banks to Aden as an opportunity to reinforce financial stability and integrity, including by extending regulation to all deposit-taking institutions and enhancing the AML-CFT framework. The IMF expects the next Article IV consultation with Yemen to follow the standard 12-month cycle.
International Monetary Fund 2026-04-03
International Monetary Fund concludes Yemen Article IV consultation after 11-year pause and urges sequenced fiscal and monetary reforms
The IMF Executive Board concluded the 2025 Article IV consultation with Yemen, resuming surveillance after an 11-year hiatus, and noted tentative stabilization amid fragile macroeconomic and humanitarian conditions. Real GDP is estimated to have contracted by 0.5% in 2025, with a further 0.7% decline projected for 2026, while weak exports and higher imports are expected to pressure the external position. Executive Directors welcomed fiscal consolidation and backed plans for revenue mobilization, stronger public financial management, prudent monetary policy, a market-based exchange rate, and measures to reinforce financial stability and AML/CFT.