High food prices and low purchasing power remain a significant concern for millions of households
Violent conflict now in its seventh year has crippled Yemen’s economy and continues to be the main driver of food insecurity. In addition to the direct impacts of active fighting, the impacts of political instability, severe foreign exchange shortages, and further currency depreciation—driving rising food prices and significantly reduced access to income—are placing mounting economic pressure on households. Over time, many have been forced to engage in severe food consumption and livelihood coping strategies, including reducing the number of meals consumed per day and selling productive assets. Currently, flooding during Yemen’s second rainy season and the impacts of a third wave of COVID-19 are further constraining affected households’ resources.
Above-average food prices and low purchasing power remain a significant concern for millions of households, particularly across poorer wealth groups. In southern areas controlled by the internationally-recognized government (IRG) where the currency continues to depreciate, the average cost of the minimum food basket increased by a further 7 percent in the first three weeks of August 2021. Meanwhile, in northern areas controlled by the Sana’a-based authorities (SBA), fuel shortages are again forcing households to purchase fuel at higher unofficial prices.
Following recent scale-up, almost 40 percent of the Yemeni population are again receiving monthly humanitarian food assistance distributions. However, millions of households still face food consumption gaps. As a growing proportion of households have become more heavily reliant on food assistance, Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!) outcomes are expected to persist nationwide, with worst-affected households facing Emergency (IPC Phase 4) or Catastrophe (IPC Phase 5) outcomes. Although not the most likely scenario, Famine (IPC Phase 5) would be possible if there is a significant shock to commercial food import levels or if food supply is otherwise cut off from particular areas for a prolonged period.
A third wave of COVID-19 has been impacting Yemen in August. In the second week of August, Yemen recorded its highest weekly caseload in two months, with 214 confirmed cases and 15 associated deaths. The number of new COVID-19 cases reported daily has reached levels similar to the peak of the first wave and has not yet plateaued. Currently, only 1 percent of the population are vaccinated. Given this and limited public health services, essential health expenditures are likely to increase for households impacted by the virus, further constraining poor households’ ability to meet food and essential non-food needs.