Risk To Growth Outlook: Inflation

March 2007 | Economic Analysis

Inflation is a risk to our otherwise positive growth outlook for Yemen, not least because it will deter investment and eat into consumer spending. Although we acknowledge the benefits of subsidy reform to the fiscal picture, a CPI rate of 31% y-o-y (in December 2006). The pressures are being led by food prices, which rose by 48.2% y-o-y (4.1% in m-o-m terms) in December, while most other price categories have been static at 0% y-o-y for the last few months.

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