An economist urges the government to take austerity to face the effects of corona on the economy
English - Monday 01 June 2020 الساعة 04:02 pm
Newsyemen, private:
The national economist, Dr. Youssef Saeed Ahmed, a professor of economics at the University of Aden, called on the government to take urgent austerity measures to face the effects of the Corona pandemic on the economy, in light of the decline and fragmentation of resources and the widening budget deficit.
He stressed the need to reduce the current spending bill - salaries and wages - which amounts to more than one trillion and 350 billion riyals, in return for expected returns that may not exceed "450" billion riyals at best in 2020, bringing the deficit size this year to about one trillion riyals.
Saeed warned, in a analysis published on his Facebook page, "Analysis: Yemen, no one is paying attention to the economic cost of Corona", from continuing to cover the budget deficit from printing money, which will lead to a period of hyperinflation that no one can control.
He added, government funding should not continue through borrowing from the central bank and its sustainability as a monetary mechanism for regular and uncontrolled spending, because it leads to damage to the purchasing power of money and excessive inflation, which we have come to see its effects through creeping inflation and exchange rate mechanisms that exceeded the level of 700 riyals against Every dollar.
The national economist urged the government to cut spending, impose taxes on high-salaries, or suspend some of the benefits that those with higher job grades receive in these delicate and economically difficult conditions.
The Corona pandemic caused the state to lose more than 50% of oil resources, at a time when it was no longer governorates: Hadramawt, Shabwa, Marib, Mahara and Taiz, and recently Aden was added to them, no longer supplied the sovereign and customs taxes to the government account in the Central Bank of Yemen.
