IMF: economic growth in Yemen

The International Monetary Fund on March 8 expected the Yemeni economy to grow at a rate of 2.4% and welcomed the signs of improvement appeared recently on the Yemeni economy which grew 6.5 % in the year 2000.

News reports said that the IMF explained in its annual revision of the Yemeni economy that this improvement is basically attributed to the increase of the world oil prices as well as the efforts made by the authorities to reduce general expenditures.

The IMF added that prospects of long term growth has been supported in Yemen after it ( Yemen) had settled a border issue with Saudi Arabia. IMF officials believe that this will permit Yemen to better integration with the regional economy.

The IMF, on the other hand expressed concern because of the increase in the inflation rate which has become closer to 11% in the year 2000 because of the drought and expected this inflation rate to reach 9% this year and it also criticized the slowness in implementing the economic program by the end of 1999 but it approved an economic program and a tough economic policy for this year with the aim of reducing inflation and supporting growth.

Worthy mentioning that this program includes structural reforms to put an end to poverty but success in this regard depends on implementing reforms at their due time so as to deal with the actual weakness in the works and the investment climate.

Officials at the Fund proposed tax reforms that will reduce the country's dependence on oil revenues and create, with the passing of time, a more attractive atmosphere for investment. The Fund also encourages the issuance of a legislation of privatization and urged the country to implement a mechanism to fight corruption.