Yemen Faces Sharp Economic Contraction and GDP Collapse

A recent strategic report from the Mokha Center for Studies has confirmed that Yemen’s economic decline is expected to persist throughout 2024. This downturn is largely driven by the Houthi-imposed blockade on oil exports since late 2022 and their continued control over state revenues.
The report highlights a sharp 13% contraction in Yemen’s GDP at current prices compared to 2023, with the economy shrinking to approximately $16.2 billion by October 2024. This marks a staggering 31% decline in GDP relative to 2022.
Citing estimates from the International Monetary Fund, the report notes that real GDP has contracted by a further 1% in 2024—part of a prolonged economic decline that has been ongoing since 2014. Per capita GDP has plummeted to just $464, down from $1,579 in 2014, reflecting a severe decline in living standards.
The report also outlines the efforts of the Central Bank of Yemen, which, bolstered by a $300 million deposit from Saudi Arabia, conducted hard currency auctions totaling $2.026 billion through August 2024. Despite these measures, the bank continues to grapple with major challenges, particularly market manipulation in the foreign exchange sector. The report warns that without comprehensive and sustainable reforms, the situation is likely to worsen.