Yemen's economy is expected to contract 28.1% this year as it is continuing to face big challenges amid the ongoing armed conflict, news agencies quoted a report by the IMF as saying on Saturday.
In the meantime, an economic recovery depends on an end to the conflict which has deepened the country's woes, it said.
And it is expected to see an 11.6% growth in 2016 on good indicators such as considerable donor aid pledges as well as possibility to resume oil and gas exports, it added.
The financial situation has lately deteriorated with Yemen's foreign currency reserves declining sharply from around $4 billion in late 2014 to around $1.7 billion and public debt increasing in the first half of 2015.
All sectors have been affected due to the war which escalated after the Saudi-led military intervention was launched against the Houthi militants in late March.
According to official estimates, the national economy has been paralyzed by around 90% as all exports and imports stopped due to a blockade on all sea, land and air ports. The blockade was part of the Arab military intervention.
The halt to oil and gas exports on which the national economy depends largely has led to several challenges topped by a lack of liquidity a matter which has been directly reflected on the decline in the country's foreign currency reserves and the soaring inflation.
Complications such as lack of fuels and food supplies, because of the blockade, boosted the increasing inflation rate, it said.
The IMF report expected the inflation rate to rise by 30% this year and that it will fall to 15% next year.
The continuing war, falling oil prices and lack of reforms represent key risks to the Yemeni economy for now, it said, while affirming that finding a solution to the conflict remains the only guarantee for a mid-term economic recovery.