Saudi Arabia to provide $500m in new economic support for Yemen

Saudi Arabia to provide $500m in new economic support for Yemen

RIYADH: Saudi Arabia announced on Friday a new economic support package for Yemen worth $500 million and aimed at bolstering the government’s budget, stabilizing the Central Bank of Yemen, and fostering the development and stability of the Yemeni people.

The latest assistance includes a $300 million deposit into the Central Bank of Yemen to improve economic and financial conditions, alongside $200 million to address the Yemeni budget deficit, the Saudi Press Agency reported.

The latest funding forms part of a larger $1.2 billion initiative through the Saudi Development and Reconstruction Program for Yemen. The program focuses on enhancing food security; supporting wages and operating expenses; and aiding the Yemeni government in implementing its economic reform agenda.

The new support aims to establish economic, financial, and monetary stability in Yemen by strengthening public finances, building government institutional capacity, and enhancing governance and transparency, the SPA added.

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The assistance will empower the private sector to drive sustainable economic growth, create job opportunities, and place Yemen’s national economy on a more sustainable path for economic and social development.

Saudi Arabia’s previous economic assistance included deposits in the Central Bank of Yemen, which increased foreign exchange reserves, stabilized the local currency, reduced exchange rates, and stimulated the growth in gross domestic product.

The assistance also lowered fuel and diesel costs, reduced prices of imported food commodities, and supported the import of essential goods, including wheat, rice, milk, cooking oil, and sugar.

In addition, Saudi grants have helped the Yemeni government manage operating expenses, pay salaries, and mitigate the economic crisis by boosting foreign exchange reserves and restoring confidence in Yemen’s financial institutions.

These measures reduced reliance on borrowing to finance budget deficits, enhanced financial system stability, and alleviated inflationary pressures.

Saudi Arabia has also prioritized critical sectors in Yemen through grants and projects implemented by SDRPY, including more than 260 development initiatives across various Yemeni governorates, covering education, health, water, energy, transportation, agriculture, and fisheries.

These projects have improved access to essential services; provided medical treatments for chronic diseases and cancer patients; supported education; and ensured the provision of petroleum derivatives for electricity generation.

Saudi Arabia’s grants for petroleum derivatives have played a vital role in operating 80 power plants across Yemen, boosting energy efficiency and revitalizing productive and service sectors.

Saudi Arabia to provide $500m in new economic support for Yemen

ARAB NEWS