Economic data shows that Yemen’s oil export for September failed to meet expectations and instead registered a significant drop, which according to economic experts will expose the impoverished nation’s economy to further hardship by exacerbating its already existing difficulties.
Yemen Central Bank already published a report in September which not only acknowledged the oil export drop but warned against adverse economic ripple effects should the country fail to realign its production to target and thus miss out on much needed income and foreign currencies.
Given that Yemen’s national budget relies almost entirely on its oil industry (70% of all funds) to remain afloat, any hiccup, delay or sabotage carry severe repercussions. Because the impoverished nation missed the mark in September, Yemen national budget fell 8% to $231 million to increase the annual decline to 24.4% from a previous 22.4% in August.
To add to Yemen’s crippling dependence on its oil industry, the country has been using its export to replenish its foreign currency reserves and thus back its liabilities. Foreign-exchange reserves are assets held by central banks and monetary authorities, to back one country’s liabilities.
With Yemen looking to boost other industry sectors to reduce its oil dependency, the coalition government has worked to foreign funding to start-jump its under-develop and lagging economy and turn the tables around.
To do that, Yemen hopes to secure a long term loan with the International Monetary fund.