Yemeni govt. needs to "step up efforts" to control its spending -- IMF

WASHINGTON, Dec 13 (KUNA) -- The International Monetary Fund (IMF) said Thursday that the Yemeni Government "needs to step up efforts to control and rationalize its spending, especially on the public wage bill, and improve revenue collections." This came in a statement following an IMF's team visit to Amman, Jordan to discuss with officials from the Government and Central Bank of Yemen (CBY) "recent developments and economic measures to mitigate the humanitarian crisis in 2019." "Almost four years of armed conflict have severely weakened Yemen's economy. With hydrocarbon exports largely suspended, shortage of foreign exchange continued to compress the availability of basic imports - foremost food, fuel, and medicines," the statement stressed.
It noted that "the population's purchasing power has been crippled, especially by the conflict's adverse impact on economic activity and high inflation. Stepped up humanitarian aid has so far forestalled outright famine conditions, and aid agencies are warning that the humanitarian crisis remains at a tipping point." It affirmed that "while the armed conflict remains the ultimate cause of the humanitarian crisis, there was agreement that better economic policies supported by increased donor grants could appreciably contribute to mitigating the humanitarian crisis in the short run." "Donor grants channeled through the CBY would not only contribute foreign exchange resources for essential food imports but also provide a sterilization tool to help stabilize the exchange rate and reduce inflation," the IMF said.
It added "at the same time, the government needs to step up efforts to control and rationalize its spending, especially on the public wage bill, and improve revenue collections." It stressed that "reducing the fragmentation of Yemen's policy making institutions would help alleviate the humanitarian crisis." "The package of economic measures discussed will only provide a stopgap solution mitigating the humanitarian crisis in the short run. Restoring the sustainability of the country's external and fiscal positions beyond 2019 will require additional economic stabilization efforts," the statement noted.
It indicated that the mission team and the authorities "agreed to review economic and policy developments again in about three months." (end) si.ibi