Macroeconomic Forecast Yemen

April 2006 | Macroeconomic Forecasts

We forecast real growth in Yemen at 3.5% in 2006, dipping to 3.2% in 2007, though growth is likely to rise beyond the forecast period as new (but relatively small) oil fields come onstream from 2008. With population growth estimated at around 3.5%, this means per capita GDP will actually contract in 2007. Further cuts in fuel subsidies, as recommended by the World Bank, would pose an upside risk to the fiscal deficit but a downside risk to growth and inflation. It should be noted that there is a dearth of reliable and timely data on Yemen's economy, and by some estimates, official data capture only 50% of GDP, due to the large size of both the informal sector and the black market. As a result, all figures should be treated with some caution.

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