The Executive Board of the International Monetary Fund (IMF) on Saturday resumed Article IV consultations with the Yemeni legitimate government after 11 years.
Reflecting the country’s improved institutional performance, this development is an important indicator of restoring channels of cooperation with international financial institutions and boosting confidence in the reform path being taken by the government.
“The renewed consultation reflects enhanced institutional capacity and data production,” the IMF said in a statement.
It positively noted the government’s efforts to achieve the minimum economic stabilization despite the extraordinary circumstances the country is going through.
The Fund said Yemen’s economy is gradually emerging from the deep recession following the suspension of oil exports in 2022, with the pace of contraction moderating and fiscal and external pressures easing. However, it warned that the war in the Middle East is expected to weigh on Yemen’s economy this year, while risks to the outlook remain substantial.
IMF directors affirmed the authorities' commitment to revenue mobilization and fiscal governance enables the delivery of essential public services.
They noted that a market-based exchange rate supports Yemen’s economic recovery and social stability.
Directors said that engagement with creditors to support a comprehensive debt treatment is also essential to restore debt sustainability.
Meanwhile, the prioritization of essential spending is expected to weigh temporarily on the fiscal balance, the IMF said, but over time will help protect the most vulnerable.
The Yemeni government welcomed the approval of the IMF’s Article IV consultation results after an 11-year pause - an important step restoring international engagement and confidence in its reform agenda to strengthen financial management, transparency and fight corruption, despite the war outcomes and the suspension of oil exports as a result of Houthi attacks.
The government reaffirmed its commitment to continue implementing a comprehensive reform program in various sectors, and to work in coordination with international partners to alleviate human suffering and achieve economic stability.
It then noted the adoption of the 2026 general budget as part of efforts to revive state institutions.
Despite the positive indicators, the IMF said the challenges facing Yemen's economy remain large and complex amid the ongoing war, institutional fragmentation and lack of financial resources.
The IMF stressed that the risks surrounding the future outlook remain high, especially in light of regional developments and their potential impact on the global economy.
It said inflation, fluctuating exchange rates and rising import costs will cause major pressure on the economy, requiring the adoption of balanced precautionary policies to maintain monetary and financial stability.
From 2027 onward, the IMF said the economy is expected to begin regaining momentum as inflation declines, real incomes recover and remittances and non-oil exports expand under the authorities’ Agriculture Plan.
