While Yemen continues to face a protracted political crisis both north and south of its capital, caught in between the Houthis’ advances and al-Harak’ secessionist claims, the impoverished nation seems to be enthralled in a never-ending cycle of violence, unrest and aggravated political tensions.
To make matters worse Yemen Central Bank issued on Saturday a stern warning as to the country’s economic health or rather the lack of. Just as it did back in August 2013, the government spent more in January to import fuel for domestic use than it received for crude oil export sales, thus putting the nation’s balance sheet out of balance and on dangerous economic quicksand.
Heavily reliant on its oil industry to finance its national budget and maintain healthy level of foreign currencies to meet its short term obligations. Back in August the Central Bank declared a dip in oil production of 25% in comparison to 2011 for the same period. According to YCB data Yemen’s export sales for the first half of 2013 were $1.328 billion while the government spent $1.368 billion on domestic fuel imports.
The Oil ministry now revealed that January saw the country’s oil and gas production take a nosedive due to acts of sabotage and related insecurity. January import bills clocked at $258 million while its exports only reached $215, putting Yemen in an economic red zone. With a deficit of $43 million for January alone, the economically battered nation has no mean to weather such a financial storm.
Moreover, as a result of Yemen’s oil deficit foreign currency reserved dropped to $5.23 billion, a billion less than in December 2013.