Business

Yemen ‘can achieve 4.5% growth’

Yemen’s economy can rebound next year and achieve growth of as much as 4.5 per cent if the country’s political standoff is resolved, Industry and Trade Minister Hesham Sharaf said.

The government had forecast a similar growth rate this year before protests calling for the ouster of President Ali Abdullah Saleh began in January, and will now “be very lucky” to record 3 per cent expansion, Sharaf said in a phone interview on Sunday from the capital, Sana’a.

Direct and indirect loses to Yemen’s economy have reached between $5 billion (Dh18 billion) and $8 billion, Sharaf said. Gross domestic product in 2010 was estimated at $31 billion by the US Central Intelligence Agency.

Yemen, the poorest Arab nation and one that has been used as a base for Al Qaida attacks, has been wracked by violence as the political standoff deepened with military and tribal leaders joining the opposition. Efforts by Gulf Arab countries to mediate an agreement ending Saleh’s three-decade rule have repeatedly broken down.

Sharaf said there has been a slump of as much as 80 per cent in some areas of the economy such as tourism, construction and investment projects.

About 70 per cent of private-sector workers, or at least 200,000 people, have lost jobs, he said, forecasting inflation of between 12 per cent and 14 per cent this year. Sharaf said government expenditure is “minimal” and goes mostly toward paying salaries.

The country hasn’t spent $2 billion earmarked for investments and foreign-backed projects this year, and a similar sum would be available next year if the political tensions ease, he said.

The country’s budget for 2011 was $10 billion. Yemen has sold $2 billion of oil since the resumption of exports about six weeks ago, Sharaf said. Tribes opposing Saleh destroyed the pipeline that carries oil from Marib.