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Food Price Developments Analysis in Yemen and the Associated Socio-Economic Impact (March 2022) [EN/AR]

Govt. Yemen
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Yemen has been experiencing a constant rise in the price* of key food commodities, which soared sharply between 2014 and 2021, and even more severely to record high during 2021. This has had a direct impact on the living conditions for Yemeni citizens and compounded the already dire situation and suffering triggered by the ongoing conflict and war. It also widened the poverty gap and deepened the state of deprivation in a country that, even prior to the current crisis, was among the poorest countries in the Middle East and North Africa (MENA) region.
Building on a simulation scenario on welfare changes in Yemen, this study briefly reviews developments in price of food commodities, including the main drivers, trends and consequences, as well as proposed actions to mitigate the impact of rising prices on Yemen’s economy and the standard of living for citizens at the short, medium and long terms.

This paper covers six sections; the first and second provide an overview about the current food situation in Yemen, as well as food price developments and trends. They also highlight manifestations of this problem including major causes and drivers behind rising food prices in the country. In section three, it addresses the economic dimensions of the problem such as trade balances. In section four, it sheds light on the social impacts of high food prices at the level of food security and nutrition, in addition to the quality of food consumption, income sources and poverty rates (all of which are dimensions and indicators that influence deprivation, household poverty including child poverty, health, education, standard of living, along with an analysis of social and behavioral consequences).

Section 5 deals with future price projections - based on IMF estimates regarding future trends of global economic variables - including the most likely scenarios amid continuing depreciation of the local currency (YER) and fuel shortage crisis. In the last section (section 6), it introduces a set of policy proposals that can help in addressing the problem and improving the situation.