S\u00e3o Paulo \u2013 The economic situation of Yemen is serious, but may improve in coming years. After recording a reduction of 10.5% in Gross Domestic Product (GDP) due to protests in 2011, Yemen should grow 0.1% this year and 4.4% in 2013. For these International Monetary Fund (IMF) projections to be confirmed, however, authorities in the country need to improve management of financial resources. A delegation from the Fund met with the Yemeni rulers from December 5th to 9th, and disclosed a report with the results of the meeting on Wednesday (12).<\/p>\n
According to the study, the evaluations of figures of the economy show that the rate of inflation should end 2012 under control and at \u201csingle digits\u201d. Apart from that, exchange reserves rose from US$ 1 billion to US$ 5 billion and the fiscal deficit should end the year at 5.5% of GDP. These evolutions in the economy of Yemen have already, for example, allowed the government to reduce the benchmark interest rate from 20% to 18%, allowing for more credit to remain available for investors. To the IMF, this is still little.<\/p>\n
\u201cYemen\u2019s economic challenges will continue to be very serious in 2013 especially in view of the high poverty and unemployment rate particularly among the youth,\u201d says the Fund\u2019s report. Some of the challenges that face Yemen are the continued attacks by local factions to oil pipelines and electrical transmission lines and oil contraband. Apart from that, Saudi Arabia has reduced oil transfers to the country.<\/p>\n
IMF technicians evaluate that the price of oil is low and recommend that authorities increase its price. With a higher oil price, the local government could generate greater tax revenues and promote improvement in the energy sector, invest in infrastructure, growth of the economy, a reduction in poverty and job generation. <\/p>\n
Yemen also needs to guarantee greater security to the banking sector. According to the IMF, this sector needs laws to be followed, and a more specific regulation for liquidation of banks in bad financial position. For the economy to return to a path of growth, says the IMF, Yemen will need to continue relying on foreign help. The fund warns that authorities in the country need to make efficient use of the transfers it receives.<\/p>\n
*Translated by Mark Ament<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
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