The Yemeni economy is expected to contract by -3.3% in 2020
English - Monday 11 May 2020 الساعة 09:29 pm
Aden, Newsyemen, private:
A new economic study expected the Yemeni economy to return to negative rates again this year, with a contraction rate of -3.3%, due to the economic effects and repercussions of the Coronavirus outbreak and the decline in oil prices.
The growth projections for the Yemeni economy before the Corona pandemic had indicated a positive growth of about 2.5% for the year 2020, which had begun to recover during 2019, after years of contraction that reached -30% due to the war.
And the study "Yemen in the Face of Corona Virus" predicts that the contraction of the Yemeni economy will return to negative rates again in 2020, as a result of the Corona pandemic and the continuation of prevention measures, which will result in several economic and social repercussions.
The study issued by the Ministry of Planning and International Cooperation also expected that the spread of the virus and preventive measures from it would lead to a decline in public revenues, taxes and customs, as a result of declining production and a decrease in the volume of trade and business.
The study, funded by UNICEF, also expected that public sector payrolls would decrease due to limited government revenue, suggesting that these conditions would reduce the purchasing power of millions of Yemenis who are food insecure.
The "FuseNet" early warning network had expected in its last report a decrease in the exchange rate in the parallel market in the coming months, in the absence of more financial intervention, which would increase food prices, and the inability of most of the population to expand income earning.
Yemen relies on imports by 80 to 90% to cover its basic needs, and according to the study, the year 2020 will witness a shortage of imported goods and the suffering of manufacturers from the disruption of trade and supply chains, which leads to higher commodity prices.
The study said, expatriate remittances are likely to decrease to 60 -70% in 2020, due to the outbreak of the Coruna virus and the stagnation of the economy in many of the expatriate countries, which will deprive the country of the most important source of hard currency resources.
The Corona pandemic has had a wide negative impact on the global economy, struck the world with a stalemate, and almost total disruption of production and supply lines and transportation, in addition to the financial markets, transportation, tourism, energy and oil sectors, and putting the world in isolation as a result of quarantine.
