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CENTRAL BANK OF YEMEN
ANNUAL REPORT
2010
RESEARCH AND STATISTICS GENERAL DEPARTMENT http://www.centralbank.gov.ye
E-mail:[email protected]
a
The Speaker – House of Representatives The Prime Minister Dear Sirs, Pursuant to Article (57) of Central Bank of Yemen Law, I am pleased to submit the Balance Sheet for the year ending on 31st December 2010, Profit and Loss Account, as certified by the external auditors, and Report of the Board of Directors on the monetary, credit and economic situation in the country. Thank you very much. Mr. Mohamed Awad Bin Humam
Governor
Chairman of Board of Directors
b
Board of Directors For the year ending on 31st December 2010
Mr. Ahmed A. Rehman Al-Samawi: Governor and Chairman of the Board of Directors.
Mr. Mohamed Awad Bin Humam: Deputy Governor and Vice Chairman of the Board of Directors.
Mr. Ahmed Ubaid Al-Fadhli - Vice Minister of Finance Member Mr. Ali Ali Al-Nouseif Member
Mr. Abdul Gabbar Hayel Saeed Member Mr. Munassar Saleh Mohammed Al-Quaiti Member Mr. Abdul Rahman Mohammed Al-Kuhalli Member
INDEX PAGECONTENTSSUBJECT
3World and Domestic Economic Developments Chapter One13ProductionChapter Two25Government Finance Chapter Three
35Money and Credit Chapter Four
49External Sector Chapter Five61Balance Sheet 79Statistical Appendices81Money Supply Appendix 182Changes in Money Supply Appendix 283Balance Sheet of the Central Bank of Yemen Appendix 384Balance Sheet of Commercial Banks Appendix 486Deposits of Commercial BanksAppendix 587Interest RatesAppendix 688Currency Issued by Denominations Appendix 789Structure of Banking System Appendix 891Balance of PaymentsAppendix 994Central Government FinanceAppendix 1096National Accounts Appendix 11103Agricultural ProductionAppendix 12109Consumer Price Indices Appendix 13110(a) Market Exchange RateAppendix 14111(b) Exchange Rate of Major Foreign Currencies 113Trade BalanceAppendix 15114(a) Exports by sections of H.S. Appendix 16121(b) Exports by Country127(a) Imports by sections of H.S. Appendix 17134(b) Imports by Country
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5
I. WORLD ECONOMIC DEVELOPMENTS
Introduction
In 2010 the performance of the world economy improved more strongly than was expected, continuing its recovery from the global crisis, but with the speed of recovery varying from one country to another. After shrinking by 0.5% in 2009, the world economy achieved a growth rate of 5.1% in 2010 and is expected to slow down to 4.3% in 2011. Some of the causes of the improvement in the performance of the world economy were the pursuit of several effective economic policies and measures in most developed and emerging countries.
The second half of 2010, in particular, witnessed a significant improvement in international financial positions as reflected in the rise of financial market indices and the relaxing of bank credit conditions, especially in developed economies. Financial pressures, however, appeared once again in some Euro area members .
On the other hand, the prices of oil and other primary commodities witnessed a large increase during 2010, as a result of stronger world demand or a decline in the supply of some primary commodities, including some farm produce, which was damaged in some exporting countries as a result of bad weather, thus turning them into importing countries. Soaring food prices were among the most important factors leading to rising inflation particularly in emerging countries.
Advanced Economies
The pace of economic activity in these countries in 2010 was weaker than expected, as growth rates are still slow and unemployment still high, particularly with the reappearance of financial pressures in some Euro area countries. After shrinking by 3.4% in 2009, the economies of these countries as a group grew by 3.0% in 2010 and is expected to register a growth rate of 2.2% in 2011, which is too low and
6
insufficient to reduce the prevailing high unemployment significantly.
Inflation is expected to accelerate from 1.6% in 2010 to 2.6% in 2011 despite the subdued economic performance reflecting the lingering negative effects of the global financial crisis. The challenges and risks still facing these economies necessitate the carrying out of additional policies and measures to reform their financial sectors and public finances, particularly in the Euro area.
The United States
The United States’ economy, after shrinking by 2.6% during the previous year, achieved a growth rate of 2.9% in 2010. Despite the progress achieved in stabilizing the financial sector in this year, the real estate sector is still weak. Despite the fiscal measures adopted at the end of 2010, economic growth is expected to weaken to 2.5% in 2011.
The Euro Area
After shrinking by 4.1% in 2009, GDP in the Euro Area achieved a weak growth of 1.8% in 2010 as a result of the financial disturbances
experienced by some of its members. The growth rate is expected to be weak at 2.0% in 2011 reflecting the continuation of financial pressures,thus necessitating the adoption of quick and comprehensive measures to reform the financial systems and rectify the fiscal imbalances.
Japan
After shrinking by 6.3% in 2009, which was the largest decline since 1974, the Japanese economy rebounded growing by 4.0% in 2010, as a result of the adoption of a series of stimulative policies and measures. The Japanese economy, however, is expected to experience an absolute decline of 0.7% in 2011.
Developing and Emerging Countries
Growth in the economies of the developing and emerging countries as a group accelerated from 2.8% in 2009 to 7.4% in 2010, but is expected to slow down to 6.6% in 2011. The strong growth in these economies is a reflection of the continuation of robust domestic demand coupled with increasing global demand for primary
7
commodities. Furthermore, these countries are attracting an increasing flow of foreign investments, given the slowdown in growth in developed countries. Inflation, on the other hand, accelerated in the developing countries as a group from 5.2% in 2009 to 6.1% in 2010 and is expected to rise further to 6.9% in 2011.
Asian Emerging Markets
Growth in the Asian emerging countries accelerated from 7.2% in 2009 to 9.6% in 2010, the slowdown in 2009 being caused by the global recession. Economic growth in China soared from 9.2% in 2009 to10.3% in 2010 but it is expected to slow down marginally to 9.6% in 2011. In India, on the other hand, growth rose from 6.8% in 2009 to 10.4% in 2010 but it is expected to decline to 8.2%. Economic growth in the Asian group of countries, which includes Indonesia, Malaysia, the Philippines, Thailand and Vietnam, rose sharply from 1.7% in 2009 to 6.7% in 2010.
The Middle East
The economic conditions of this region vary from one country to another for it includes oil rich economies in the Gulf as well as countries with scarce resources relative to their populations. The economic conditions in this region have been affected during most of the last quarter century to a large extent by international oil prices. Economic growth in this region improved substantially from 2.8% in 2009 to 4.4% in 2010 and is expected to strengthen further to 4.2% in 2011 in view of the increase in international oil prices, particularly in relation to the Gulf Cooperation Council states. The GCC countries, which own 41% of the international oil reserves, are expected to realize a growth rate of 7.8% in 2011compared with 5.0% in 2010.
8
II. DOMESTIC ECONOMIC DEVELOPMENTS
The Economic Situation in 2008
In 2010 macroeconomic policies were coordinated to deal with international events in order to contain their negative repercussions and combat their harmful effects on the national economy.
Based on data received from the Central Statistical Organization, real growth in the national economy strengthened from 4.3% in 2009 to 7.8% in 2010, while in the non oil sectors real growth improved from 6.2% in 2009 to 7.1% in 2010. On the other hand, inflation, as measured by the CPI, rose from 5.4% in 2009 to 11.2% in 2010.
The domestic and external financing of the budget showed that the fiscal deficit fell sharply from 8.3% of GDP in 2009 to 4.8% in 2010, mainly as a result of the increase of government oil export revenues. In 2010, the government’s share of oil exports was 33.2 million barrels amounting to 2652 million dollars, compared with 30.9 million barrels and 1,959 million dollars in 2009.
As a consequence of the above events, external public debt fell from 21.5% of GDP in 2009 to 21.2% in 2010, while gross domestic public debt increased from 22.4% to 24.2 of GDP during the same period. These ratios are on the safe side and the external public debt ratio remains among the lowest in the Middle East.
In the area of money and credit, monetary policy was characterized by flexibility in the face of monetary developments, whether domestic or international, particularly in relation to interest rates and inflation. In 2009 the Central Bank was keen as much as possible to strike a balance between containing inflationary pressures and at the same time stimulating economic activity. The interest rate on local currency saving deposits was raised to 20% in March 2010. Compulsory reserve requirement on foreign currency deposits was kept unchanged at 20% and bearing no interest. Compulsory reserve requirement on local currency deposits was also unchanged at 7% and without interest.
In the same context, money supply growth fell from 10.6% in 2009 to 9.2% in 2010. Basically
9
domestic liquidity growth in 2010 was caused by an increase in net domestic assets and a decrease in net foreign assets of the banking system.
In 2010 the Central Bank of Yemen continued its intervention in the foreign exchange market, in order to replenish the market with its needs of foreign currencies, absorb excess liquidity, relieve inflationary pressures in the economy and maintain exchange rate stability. Central Bank foreign currency sales decreased from US dollars 1,995 million in 2009 to US dollars 1,466 million in 2010. The dollar strengthened against the Yemeni Rial from 207.32 Rials at the end of 2009 to 213.8 at the end of 2010.
Turning to the external sector, the current account deficit decreased from US dollars 1,290 million in 2009 to US dollars 905 million in 2010 while the current account deficit narrowed sharply from US dollars 2,565 million in 2009 to 1209 million in 2010, basically as a result of higher crude oil exports and income receipts. The capital account, on the other hand, registered a deficit of dollars 124 million in 2010 against a deficit of dollars 312 million the
previous year. Generally speaking, oil exports have a profound effect on the external accounts. International oil prices kept rising in 2010 averaging dollars 79.8 a barrel compared to dollars 63.5 in 2009.
By contrast, gross foreign reserves of the Central Bank decreased from US dollars 6704 million at the end of 2009 to US dollars 5689 million at the end of 2010.
In 2010, there was a significant expansion in financial and banking services. Several new bank branches and offices were set up in that year all over the country. In 2010 the number of ATMs installed in the country increased by 22% to reach 446, while the number of POS terminals reached 1887 by the end of the year. Foreign exchange companies and bureaux amounted 601 in 2010. Cheques cleared decreased to 678,000 representing a total amount of YR 2,175 billion in 2010 compared to YR 2,047 billion in 2009.
Production
Growth in the extractive industries sector registered a high rate of 12.4% in 2010 compared
10
with a decline in absolute terms of 6.6% in the previous year. The manufacturing sector expanded by 6.1% in 2010 against 5.5% in 2009. On the other hand, growth in the electricity, water and gas sector slowed down from 8.9% in 2009 to 8.1% in 2010. The expansion of the Agriculture, forestry and fisheries sector accelerated from 5.2% in 2009 to 6.8% in 2010. Growth in the construction sector strengthened from 12.8% in 2009 to 13.4% in 2010.
Growth in the finance, insurance, housing and business services sector was 2.4% in 2010 compared with a decline in absolute terms of 4.8% in 2009. In the transport, warehousing and communication sector, growth receded from 16.9% in 2009 to 12.6% in 2010. On the other hand the expansion in wholesale and retail trade, restaurants and hotels quickened from 1.7% in 2009 to 4.8% in 2010. Government services growth was 3.8% in 2010 compared with 4.0% in 2009.
Total final consumption grew by about 12.4% in 2010 compared with 5.6% in 2009 as a result of the increase of private final consumption
by 14.4% in 2010 compared with 6.6% in 2009. On the other hand, public final consumption increased by 1.8% in 2010 compared with 0.9% in the previous year
Public Finance
Public revenues increased from 22.4% of GDP in 2009 to 27.5% in 2010, basically as a result of higher oil and gas revenues. Public expenditure also increased marginally from 32.0% of GDP in 2009 to 32.2% in 2010, owing to the expansion of current expenditures from 25.9% of GDP in 2009 to 27.2% in 2010. Capital expenditure, on the other hand, declined from 4.7% of GDP in 2009 to 4.1% in 2010. The overall fiscal deficit shrank sharply from 8.3% of GDP in 2009 to 4.8% in 2010.
External and Domestic Public Debt
In 2010 gross domestic public debt increased by 21% to what is equivalent to 24.2% of GDP, while net domestic public debt amounted to 19.9% of GDP, after taking into account government deposits at the Central Bank. Treasury bills and government bonds are the main instruments for borrowing in the
11
primary market. Treasury bills alone formed 38.2% of gross domestic public debt. On the other hand, external public debt increased by 1.8% in 2010 and the total outstanding amount was only 21.2% of GDP. 54.2% of the total outstanding external debt is owed to multilateral donor institutions and given to Yemen on extremely concessionary conditions, particularly the credits extended by IDA.
Money and Credit
By reviewing the components of domestic liquidity in 2010, we notice that M1 increased by YR 28 billion, currency outside banks by YR 15 billion and demand deposits by YR 13 billion. Quasi money grew by YR 163 billion as a result of an increase of YR 15 billion in saving, time, earmarked and pension fund Rial deposits and YR 148 billion in foreign currency deposits. Currency in circulation decreased from 48% of Rial broad money in 2009 to 47% in 2010, while Rial quasi money remained unchanged at 37% in both years. Foreign currency deposits increased from 30% of broad money in 2009 to 34% in 2010.
On the other hand, the balance sheet total of the Central Bank of
Yemen declined slightly by 0.6% during 2010. In 2010, the balance sheet total of the conventional and Islamic banks increased by 15%. In the same year, the net foreign assets of the banks increased sharply by 19%, while bank credit to the private sector increased by 8.4%. In 2010, banks invested 69.4% of their assets in foreign assets, treasury bills and Central Bank balances. At the same time, credit to the private sector remained at a low rate of 22.7% of total assets of the banks in 2010.
Balance of Payments
Preliminary data show that the deficit in the overall balance of payments fell from US dollars 1,290 million in 2009 to US dollars 905 million in 2010. The current account deficit decreased sharply from US dollars 2,565 million in 2009 or 8.5% of GDP to US dollars 1,209 million or 4.2% of GDP in 2010, partially as a result of the narrowing of the deficits in the income and services accounts and the rise in net current transfers. Furthermore, the capital account balance amounted to a deficit of US dollars 123 million dollars in 2010 after having registered a deficit of US dollars 312 million in 2009.
12
2010 2009 2008 Description
Output and Prices
Gross Domestic Product at current prices
6,374,9 5,705 6,072,3 Billion rails
29030.9 28124.2 30394.9 Million dollars
Change in percent
11.74 6.05- 19.07 Gross Domestic Product at current prices
7.82 4.30 4.01 Real Gross Domestic Product
7.10 6.21 6.43 Real non-oil Gross Domestic Product
3.64 9.92- 14.47 Gross Domestic Product deflator
11.17 5.41 18.98 CPI (average change)
12.49 10.98 10.81 CPI (end of period change)
79.8 63.5 98.9 Crude oil average export price $/barrel
Public Finance as % of GDP
27.9 22.9 32.8 Total Revenues and grants
17.6 12.5 24.0 Oil and gas revenues
9.9 9.9 8.6 Non oil revenues
0.4 0.5 0.2 Grants
32.2 32 36.6 Total Expenditure
27.2 25.9 30.7 Current expenditure
4.1 4.7 4.9 Development expenditure
4.3- 9.1- 3.8- Overall balance (cash basis)
4.8 8.3 2.7 Financing
2010 2009 2008 Description
41 38.3 27.2 Outstanding net Gross Public Debt
19.8 16.8 8.2 Domestic Debt, net
21.2 21.5 19 Foreign dept
2.7 3.6 2.7 External Debt Service as% of exports of Goods & Services
Money and credit (Change in %)
9.2 11 14 Broad Money Supply (M2)
8.5 4.6- 18 Private sector Credit
20 10 13 Benchmark deposit rate (% per annum)
2.8 2.7 3.2 Velocity of Circulation( non oil )GDP/M2
Foreign Sector (million US$)
7718.1 5855 8976.9 Exports (FOB), which out of
6348.8 4432.4 7727.8 Crude Oil
8700.5- 7867.8- 9333.8- Imports (FOB )
226.7- 552.1- 894.3- ) Transfers (net
303.8 1275 1852.8 Capital Account including net errors& omissions
905.3- 1289.9- 601.6 Overall Balance
5689 6704 8157.4 Central Bank Gross of Foreign Reserves
8.1 9.3 9.2 In months of imports
4.2- 9- 4.1- Current Account as % of GDP
213.80 207.32 200.08 Exchange rate YR/US $ ( end of period )
* Preliminary
Main Economic Indicators
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13
During 2010, the national economy
registered positive results despite the
economic changes, which the world and
our region witnessed, in addition to the
negative repercussions of the financial
crisis and external shocks emanating from
the decline in international oil prices in
2009, after which, however, they resumed
their upward trend. Meanwhile, the
government continued its efforts to carry
out the matrix of economic and social
reforms and the relentless improvement of
the investment environment.
I. GROSS DOMESTIC PRODUCT :
Gross domestic product at constant
prices increased by 7.8% in 2010
compared with 4.3% in 2009. GDP
growth in 2010 was essentially based on
both sectors of manufacturing of
commodities and production of services,
which expanded by 9.8% and 6.7%
respectively. On the other hand, non-oil
GDP growth strengthened from 6.2% in
2009 to 7.1% in 2010.
Economic Growth Rates at Current and Constant Prices
(Percentages )
Description *2009 **2010
At Current Prices
gross national product -6.05 11.74
Non-oil Gross Domestic Product 10.57 12.97
National Disposable Income -5.31 12.34
At Constant Prices(100=2000)
Non-oil Gross Domestic Product 4.30 7.82
National Disposable Income 6.21 7.10
Source: Central Statistical Organization * Preliminary ** Preliminary Estimated Figures
14
II. GDP SECTOR DEVELOPMENTS
Preliminary estimates of gross
domestic product at constant prices
for 2010 show that all economic
sectors registered positive growth
rates. Agriculture, forestry and
fisheries grew by 6.8% in 2010, while
the other sectors achieved growth
rates ranging from 0.5% for the
household sector to 13.4% for
construction.
In 2010, goods producing sectors as
a group exceeded in growth the
group of services producing sectors,
as the former registered a growth rate
of 9.8% compared with 2.2% in 2009.
Despite this strong performance the
contribution of the goods sectors to
GDP at constant prices was only
40.1% in 2010 compared with 39.4%
in 2009. On the other hand, the
contribution of services producing
sectors to GDP fell slightly from
59.6% in 2009 to 59.0% in 2010.
Growth Rates of Economic Sectors at Constant Market Prices
(2000 = 100) (Percentages ) 2010** 2009* Description
6.76 5.22 Agriculture and Fishing
12.39 -6.56 Mining Industries
6.11 5.54 Manufacturing Industries
8.14 8.90 Electricity and Water
13.38 12.83 Construction
9.81 2.21 Total Commodity Producing Sectors
4.81 1.65 Trade, Restaurants and Hotels
12.60 16.91 Transport and Communication
2.44 -4.82 Finance, Real Estate & Business Services
2.88 5.48 Social and Personal Services
3.84 4.00 Producers of Government Services
3.01 3.00 Household Sector
0.47 3.80 Non-Profit Institutions
6.70 5.33 Total Services Sectors
7.82 4.30 GDP at Market Prices
Source: Central Statistical Organization * Actual Preliminary Figures ** Estimated Preliminary Figures
15
DEVELOPMENTS OF GOODS PRODUCING SECTORS IN 2009 Agriculture, forestry and fisheries sector
At constant prices, the growth of
this sector improved from 5.2% in
2009 to 6.8% in 2010, but its
contribution to GDP at constant
prices fell slightly from 13.1% in
2009 to 13.0% in 2010..
Extractive industries sector
At constant market prices, this
sector expanded by 12.4% in 2010
compared with a decline of 6.5% in
2009, resulting in a slight increase
of its contribution to GDP from
13.3% in 2009 to 13.9% in 2010.
The reason behind this was the
increase in oil production sales
revenues , and the commencement
in the exports of ENA.
Manufacturing Industries
Growth in this sector strengthened
at constant prices from 5.5% in
2009 to 6.1% in 2010. The
contribution of this sector to GDP
however retreated slightly from 5.1
% in 2009 to 5.0% in 2010.
Relative importance of Economic sectors to GDP at constant market prices
(2000 = 100) (Percentages )
2010** 2009* Description
12.95 13.08 Agriculture and Fishing
13.91 13.34 Mining Industries
4.98 5.06 Manufacturing Industries
0.76 0.75 Electricity and Water
7.51 7.14 Construction
40.11 39.38 Total Commodity Producing Sectors
21.19 21.80 Trade, Restaurants and Hotels
19.41 18.58 Transport and Communication
8.34 8.77 Finance, Real Estate & Business Services
8.66 8.99 Producers of Government Services
1.37 1.44 Other
58.97 59.59 Total Services Sectors
100 100 GDP at Market Prices
Source: Central Statistical Organization * Actual Preliminary Figures ** Estimated Preliminary Figures
16
Electricity, water and gas
Growth in this sector retreated
at constant prices from 8.9% in
2009 to 8.1% in 2010, leaving its
contribution to GDP almost
unchanged from the previous
year at 0.8%.
Construction
Growth in this sector at constant
prices strengthened from 12.8%
in 2009 to 13.4% in 2010,
raising its contribution to GDP
from 7.1% in2009 to 7.5% in
2010.
DEVELOPMENTS OF SERVICES
PRODUCING SECTORS IN 2009
Wholesale and retail trade,
restaurants and hotels
Growth in this sector at constant
prices rose sharply from 1.7% in
2009 to 4.8% in 2010, but its
contribution to GDP at constant
prices fell slightly from 21.8% in
2009 to 21.2% in 2010.
Transport, warehousing and
communications
Growth retreated slightly in this
sector at constant prices from
16.9% in 2009 to 12.6% in 2010,
but its contribution to GDP at
constant prices rose from 18.6% in
2009 to 19.4% in 2010.
Finance, insurance, real estate
and business services
Growth in this sector amounted in real
terms to 2.4% in 2010 compared with
an absolute decline of 4.8% in 2009,
leading to a fall in its contribution to
GDP at constant prices from 8.8% in
2009 to 8.3% in 2010.
Government Services
Growth in this sector at constant prices retreated marginally from 4.0% in 2009 to 3.8% in 2010 leading to a decline in its contribution to GDP from 9.0% in 2009 to 8.7% in 2010.
III. EXPENDITURE ON GROSS DOMESTIC PRODUCT
Preliminary estimates show that the growth of expenditure on total consumption at current market prices
17
increased from 5.6% in 2009 to 12.4% in 2010, as a result of stronger growth in private final consumption from 6.6% in 2009 to 14.4% in 2010, resulting in a contribution to GDP of 76.9% in 2010 compared with 75.1% in 2009.
On the other hand, the growth rate of
public final consumption at current
market prices doubled from 0.9% in
2009 to 1.8% in 2010 leading to a rise
in its contribution to GDP to 13.2%
and the contribution of total final
consumption to 90.1% of GDP.
Growth in fixed capital formation
increased from 10.0% in 2009 to
17.0% in 2010, leading to an
improvement in its contribution to GDP
from 20.6% in 2009 to 21.4% in 2010.
In the external sector, exports of goods
and services expanded by 44.2% in
2010 compared with a growth of
30.2% in 2009, leading to an increase
in their contribution to GDP at current
market prices from 24.9% in 2009 to
32.1% in 2010. Imports of goods and
services declined by 20.9% in 2010
compared with a decline of 14.2% in
2009, leading to an increase in their
contribution to GDP at current market
prices from 35.1% in 2009 to 37.9% in
2010.
Main Indicators of GDP Expenditure Components at Current Market Prices
(Percentages ) 2010** 2009*
Rel
ativ
e im
port-
acn
e to
GD
P
Gro
wth
Rat
e
Rel
ativ
e im
port
-acn
e to
GD
P
Gro
wth
Rat
e
Description
90.06 12.40 89.54 5.58 Final Gross Consumption
13.20 1.82 14.49 0.85 Final Public Consumption
76.86 14.44 75.05 6.55 Final Private Consumption
15.77 -14.71 20.67 -23.15 Gross Investment
21.54 16.96 20.58 9.99 Gross Fixed Capital Formation
-5.77 -7500 0.09 -98.94 Change in Stock
32.11 44.23 24.88 -30.22 Exports of goods and services
37.94- 20.86 35.08- -14.24 Less imports of goods and services
100 11.74 100 -6.05 GDP at Market Price
Source: Central Statistical Organization * Estimated Preliminary Figures *** Forecast
18
IV. Prices
Annual inflation as measured by CPI
increased from 5.4% in 2009 to
11.2% in 2010, due to a large extent
owing to the higher prices of tobacco,
cigarettes, housing and transport. On
the other hand, preliminary estimates
indicate that the GDP deflator
increased by 3.6% in 2010 after
having fallen by 9.9% in 2009, but the
non-oil GDP deflator increased from
4.1% in 2009 to 5.5% in 2010.
V. Investment
The total number of projects licensed
in 2010 by the General Investment
Authority in its head office and
branches was 164, distributed among
various sectors with a total value of
130 billion Rials and fixed assets
worth 82 billion Rials, as detailed
below.
Out of the total number of projects,
53% were industrial, which was 31%
less than what was licensed in 2009.
Furthermore the value of industrial
projects reached 80 billion Rials in
2010, which was 14% lower than
Inflation Rates*
2010 2009 Description
Consumer Price Index1 (annual average)
11.17 5.41 All-items
10.30 6.46 Core Inflation
Consumer price Index (end of period)
12.49 10.98 All-items
10.07 9.55 Core Inflation2
3.64 -9.92 GDP deflator
5.48 4.11 Non-oil GDP deflator
Source: Central Statistical Organization 1-November 2005=100 2-Excluding Qat
Distribution of investment projects licensed by the general investment authority
(In YR Pillion) (Percentages )
2010 2009
Des
crip
tion
%
Valu
e
% No %
Valu
e
% No
61.5 79.8 53.0 87 29.5 92.8 46.3 126 Manufacturing
2.9 3.8 10.4 17 1.88 5.7 12.9 35 Agriculture
0.0 0.0 0.0 0 0.8 2.5 1.8 5 Fishery
24.3 31.5 16.5 27 55.6 175.4 25.7 70 Services
11.3 14.7 20.1 33 12.2 38.5 13.24 36 Tourism
100 129.8 100 164 100 314.9 100 272 Total
Source: General investment Authority .
19
what was achieved in the previous
year.
The number of projects in the
Services Sector licensed in 2010 was
27 for a total amount of 32 billion
Rials, which was lower than what was
achieved in 2009 by 61% in number
and 82% in amount.
Projects in the tourism industry in
2010 were 33 in number for a total
value of 15 billion Rials, which were
lower than what was achieved in the
previous year by 8% in number and
62% in value.
Projects in agriculture were 17 in
number worth 4 billion Rials in 2010,
which were less than what was
achieved in 2009 by 51% in number
and 33% in value.
VI. Agriculture
In 2010 the area allotted to cereal
production increased by 37% and as
a result cereal production expanded
by 50% compared to the previous
year. The area on which vegetables
are grown increased in 2010 by 4%
and that on which fruits are grown
also increased by 1.2%. Production
of vegetables and fruits was higher
than 2009 by 5.9% and 4.9%
respectively.
The area on which legumes is grown
was the same as it was in 2009 but
production increased by 21% in 2010
than it was in 2009. On the other
hand, cash crops increased by 1.5%
in area and 2.5% in production.
Likewise, Qat increased in 2010 by
4% in area and1. 4% in production.
Fodder production expanded in 2010
by 1.8% in area and 2.6% in
production.
Area and Output of Main Agricultural Crops
Growth ( % ) 2010 2009 Agricultural
Crops Area1 Prod.2 Area1 Prod.2 Area1 Prod.2
36.8 50.2 927 1012.9 677.7 674.5 Cereals
4.0 5.9 92.6 1165.0 89.0 1100.3 Vegetables
1.2 4.9 94 1036.9 92.9 988.7 Fruits
0.0 21.1 41.3 98.2 41.3 81.1 Legumes
1.5 2.5 90.7 94.7 89.4 92.4 Cash Crops
4.0 1.4 160 176.4 153.5 173.9 Qat
1.8 2.6 166 2175.8 163.0 2119.9 Fodder
20.3 10.1 1572 5759.9 1307 5231 Total
Source: Ministry of Agriculture 1 Area in Hectares 2 Production in Tons
20
VII. Animal husbandry
In 2010 the number of goats , sheep
, cows and camels increased by
12% and 11% , 12%,3%
respectively. In the same year, the
production of white meat rose by
3.0%,while eggs achieved 4%
compared with 3% the previous year
. The quantities of hides and skins,
wool and honey produced in 2010
expanded by 2.4%, 4% and 1.3%
respectively.
VIII. Fisheries
In 2010 fish production increased in
quantity as well as value for all types
of fish. In that year, seaside fish
expanded by 7% in quantity and
40% in value. Deep sea fish also
increased by 8% in quantity hauled
and 58% in value. Finally, other sea
fish also expanded in 2010 by 53%
in production and 12% in value .
Number of Animals
2010 2009
Agricultural Crops
Grow
th%
Num
ber (1000)
Grow
th %
Num
ber (1000)
12.00 34,326 6.00 30,648 Goats
10.60 35,004 7.00 31,649 Lamb
11.50 35,631 9.00 31,956 Cows
2.78 2,551 2.01 2,482 Camels Source : Ministry of Agriculture
Animal Productions in Thousands Tons
2010 2009
Agricultural Crops
Grow
th%
Num
ber (1000)
Grow
th %
Num
ber (1000)
3.20 144,103 3.00 139,635 White meat
3.37 1,166 3.96 1,128 Eggs (millions)
2.41 2,546 1.93 2,486 Hides & skins
4.00 12,586 5.00 12,102 Wool
1.32 4,231 2.96 4,176 Honey
Fish and Aquatic Catch (Quantity in Thousand Tons, Growth in
Percent and Value in Million rials)
Growth ( % ) 2010 2009
Agricultural Crops
Value Qty Value Qty Value Qty
40.3 7.0 74939 214 53428 200 Superficies
57.6 7.5 15093 43 9578.6 40 Deep Sea Fish
11.9 53.3 8257 23 7377 15 Moll uses & Crustaceans
39.6 9.8 98289 280 70384 255 Total
Source: Ministry of Fish Wealth Qty :( thousand tons)
21
IX. Education
In the academic year 2009/2010
the number of students enrolled in
public education expanded
significantly reaching 5.0 million,
2.9 million of whom were boys and
the remaining 2.1 million girls.
In view of rising demand for skilled
technical and professional workers,
the Government established many
technical and vocational institutes
and community colleges. The
number of students enrolled in these
institutes and colleges reached
25,816 in the academic year
2009/2010, out of which 22,365 are
males and 3,451 females.
The number of students enrolled in
public universities reached 192
thousand in the academic year
2009/2010, 31.9% of whom were
females. On the other hand, the
number of students attending
private universities was 19
thousand, 9% of whom were
females, reflecting public
awareness of the importance of
education.
�
Number of students at various Stages of Education
(In thousands)
2009 / 2010 2008 / 2009 Stage Total
Female
Male
Total
Female
Male
4403 1880 2523 4327 1828 2498 Basic Education
575 212 363 581 206 374 Secondary Education
4978 2091 2886 4908 2034 2872 Total
Source: Ministry of Education
Number of Students Enrolled in Technical Education
2009 / 2010 2008 / 2009
Stage Total
Female
Male
Total
Female
Male
4940 1031 3909 4932 1021 3911 Technical Diploma Social College
10981 1934 9047 10066 1797 8269 Technical Diploma (2Years)
2970 412 2558 3352 398 2954 Secondary
Professional Education
6925 74 6851 6427 85 6342 Professional Diploma
25816 3451 22365 24777 3301 21476 Total
Source : Ministry of Technical and Professional Education
Number of Students enrolled in University Education
(In thousands ) (%) 2008 / 2009
Stage Total
Female
Stage
Total
Female
Male
100 31.9 68.1 192 61 131 Public Universities
100 31.6 68.4 39 12 27 Science Colleges
100 26.2 73.8 153 49 104 Humanity Colleges
100 9.0 91.0 19 2 17 Private Universities
100 2.8 97.2 15 0.44 15 Science Colleges
100 34.7 65.3 4 1 2 Humanity Colleges
100 29.8 70.2 211 63 148 Total
�
��
25
Domestic and external financing data
for the 2010 budget indicate that a
deficit of YR 308 billion or 4.8% of GDP
was realized, compared with a deficit of
YR 473.5 billion or 8.3% of GDP in
2009.
Public Revenues: Public revenues increased by 37.1%
from YR 1,279 billion in 2009 to YR 1,753
billion in 2010. The increase was
concentrated in oil and gas revenues,
which amounted to 57%, mainly owing to
higher international prices and out of
which the increase in domestic oil and
gas revenues in 2010 was 43%. Non oil
revenues (consisting of tax and non tax
revenues) expanded by YR 70 billion in
2010. As a ratio to GDP, pubic revenues
rose from 22.9% in 2009 to 27.9% in
2010. 1. Oil and Gas Revenues:
Oil and gas revenues increased from
YR 716 billion or 12.5% of GDP in 2009
to YR 1,120 billion or 17.6% of GDP in
2010. Oil and gas revenues include
crude oil and gas export and domestic
oil and gas revenues.
(a) Crude Oil Exports:
Crude oil exports expanded from
YR 349 billion or 6.1 % of GDP in
2009 to YR 598 billion or 9.4% of GDP
in 2010, basically as a result of the
increase in the average export price
from 63.5 dollars to 79.8 dollars a
barrel, in addition to the increase in
the volume exported from 30.9 million
barrels in 2009 to 33.2 million in 2010.
(b) Domestic Oil and Gas
Revenues :
Domestic oil and gas revenues rose
from YR 366 billion or 6.4% of GDP in
2009 to YR 522 billion or 8.2 % of
GDP in 2010.
2. Non oil Revenues:
Non oil revenues increased from YR
563 billion in 2009 to YR 633 billion in
2010 registering a ratio to GDP of 9.9%
in both years. Non oil revenues include
tax and non tax revenues.
26
(a) Tax revenues: Tax revenues increased from YR
410 billion or 7.2% of GDP in 2009 to
YR 450 billion or 7.0% of GDP in
2010. They include direct and indirect
taxes. Direct taxes rose by 4.6% from
YR 211 billion in 2009 to YR 221
billion in 2010. On the other hand,
indirect taxes, which include custom
duties, expanded by 15.4% from YR
198 billion in 2009 to YR 229 billion in
2010.
(b) Non-tax Revenues: Non tax revenues, which include
fees and profit transfers, increased by
19.5% from YR 153 billion or 2.7% of
GDP in 2009 to YR 183 billion or 2.9%
of GDP in 2010.
II. Public Expenditures:
Public expenditures, which include
current and capital development
expenditures, increased by 12.4% from
YR 1824 billion or 32.0% of GDP in
2009 to YR 2,050 billion or 32.2% of
GDP in 2010.
1. Current Expenditures
Current expenditures, which include
wages and salaries, materials,
services, interest obligations,
Government Revenues GGGGGGGGGGGGGGGGoooooooooooooooovvvvvvvvvvvvvvvvvveeeeeeeeeeeeeerrrrrrrrrrrrrnnnnnnnnnnnnnnnnmmmmmmmmmmmmmmmmmmeeeeeeeeeeeeeeeennnnnnnnnnnnnnttttttttttttttt RRRRRRRRRRRRRRRReeeeeeeeeeeeeeeeeevvvvvvvvvvvvvveeeeeeeeeeeeeeeeeeennnnnnnnnnnnnuuuuuuuuuuuueeeeeeeeeeeeeeeesssssssssssssssssssttttt
(YR billions)
Items 2009 2010*
Total Revenues and Grants 1306.1 1778.1
Total Revenues 1278.5 1753
Oil and Gas Revenues 715.8 1120.3
Crude Oil Exports 349.4 598.3
Domestic Oil & Gas Revenues 366.4 522
Non-oil Revenues 562.7 632.7
Tax Revenues ,of which: 409.5 449.7
Direct Taxes 211.1 220.8
Indirect Taxes 198.4 228.9
Non-tax Revenues 153.2 183
Grants 27.6 25.1
* Preliminary
27
transfers and subsidies, rose by
17.3% from YR 1,478 billion or
25.9% of GDP in 2009 to YR 1,734
billion or 27.2% of GDP in 2010.
(a) Wages and Salaries (Civilian) Wages and salaries rose by 3.6%
from YR 569 billion in 2009 to YR 590
billion in 2010, as a result of the
increase in the number of retired
government employees.
(b) Materials and Services Materials and services increased by
8% from YR 199 billion in 2009 to YR
215 billion in 2010.
(C) Interest Obligations Interest obligations rose by 30.6%
from YR 125 billion or 2.2% of GDP in
2009 to YR 163 billion or 2.6% of GDP
in 2010. They include domestic and
external obligations. As a ratio of total
interest obligations, domestic
obligations fell marginally from 91.4%
in 2009 to 90.8% in 2010.
Government Expenditure GGGGGGGGGGGGGGGGoooooooooooooooovvvvvvvvvvvvvvvvvveeeeeeeeeeeeeerrrrrrrrrrrrrrrnnnnnnnnnnnnnnnmmmmmmmmmmmmmmmmmmeeeeeeeeeeeeeeennnnnnnnnnnnnnttttttttttttttt EEEEEEEEEEEExxxxxxxxxxxxxxxpppppppppppppppppeeeeeeeeeeeeeeeennnnnnnnnnnnnnnnddddddddddddddiiiiiiitttttttttttttttuuuuuuuuuuurrrrrrrrrrrrrreeeeeeeeeeeeeetttttt EEEEEEEEE
(YR billions)
Items 2009 2010* Total Government Expenditures 1823.9 2050.1
Current Expenditures 1478.2 1733.7
Wages and Salaries(Civilian) 569.4 589.9
Material and Services 199.2 214.6
Interest Obligations 124.6 162.7
Domestic (Net) 113.9 147.7
Foreign 10.7 15
Transfers& Subsidies 555.5 733.9
Subsides 397.1 562.1
Current Transfers 158.4 171.8
Other Current Expenditures 29.5 32.6
Capital DevelopmentExpenditures 269.8 261.6
Nt Lending 75.9 54.8
*Preliminary
28
(d) Transfers and Subsidies
Transfers and subsidies increased by
32.1% from YR 556 billion or 9.7% of
GDP in 2009 to YR 734 billion or 11.5%
of GDP in 2010. They include current
transfers and fuel subsidies. Subsidies
rose by 41.6% from YR 397 billion or
7.0% of GDP in 2009 to YR 562 billion
or 8.7% of GDP in 2010, mainly owing
to the increase in international fuel
prices leading to a rise in subsidies on
domestic consumption. Current
transfers rose by 8.5% from YR 158
billion in 2009 to YR 172 billion in 2010.
(e) Other Current Expenditures Other current expenditures
increased by 10.5% from YR 30 billion
in 2009 to YR 33 billion in 2010, but
decreased as a ratio of total current
expenditures from 2.0% to 1.9% during
the same period.
2. Development Capital Expenditures
Development capital spending shrank
by 3% from YR 270 billion or 4.7% of
GDP in 2009 to YR 262 billion or
4.1% of GDP in 2010.
Overall Balance
Domestic and external financing of
the budget data show that the fiscal
deficit narrowed from YR 473.5billion
Overall Balance ofOOOOOOOOOOOOOOOOOvvvvvvvvvvvvvvveeeeeeeeeeeeeeeerrrrrrrrrrrrraaaaaaaaaaaaaaalllllll BBBBBBBBBBBBBBBBaaaaaaaaaaaaalllllaaaaaaaaaaaaaaannnnnnnnnnnnnnnnccccccccccccccccceeeeeeeeeeeeeeeeee ooooooooooB ooooooooooooooofffffffffffffGovernment Finance
OOOOOOOOOOOOOOOvvvvvvvvveeeeeeeeeeerrrrraaaaaaaaaallllllllllll BBBBBBBBBBBaaaaaaaaaaaaalllllaaaaaaaaaaaannnnnnnncccccccccccccccceeeeeeeeeeeee oooooooooooooooofffffGGGGGGGGGGGGGGGoooooooooooooovvvvvvvvvvvvvvveeeeeeeeeeeeeeeeerrrrrrrrnnnnnnnnnnmmmmmmmmmmmeeeeeeeeeeeennnnnnnnnnttttttttt FFFFFFFFFFiiiiinnnnnnnnnnaaaaaaaaaaaaannnnnnnnnnnccccccccccccccceeeeeeeeeeeGGGGGGGGGGGGGGGooooooooooooovvvvvvvvvvvvvveeeeeeeeeerrrrrrrrrrrrrnnnnnnnnnnnnnmmmmmmmmmmmmmmmmeeeeeeeeeeeennnnnnnnnnnnnttttttttttt FFFFFFFFiiiiiiiiinnnnnnnnnnnnaaaaaaaaaaannnnnnnnnnnnnnnnccccccccccccccceeeeeeeeeeeeeeennnnnnnnnccccccccccceeeeeeeeeeeee
(YR billions)
Items 2009 *2010
Total Public Revenues 1278.5 1753
Grants 27.6 25.1
Total Public Expenditures 1823.9 2050.1 Overall Balance (on commitment basis) -517.8 -272
Pending Obligations - -
Overall Balance (on cash basis) -517.8 -272
Financing 473.5 308
External Financing (Net) 10.8 -3.5
Domestic Financing (Net): 462.7 311.5
Banking System 438.8 247.5
Central Bank of Yemen 175.9 186.1
Commercial Banks 262.9 61.5
NonBanking Financing 23.8 63.9
Discrepency 44.3 -36.0
* Preliminary
29
or 8.3% of GDP in 2009 to YR 308
billion or 4.8 % of GDP in 2010.
III. Domestic Public Debt:
In view of the growing government
expenditure and the consequent
continuation of budget deficits, the gross
domestic public debt increased from YR
1,277 billion or 22.4% of GDP in 2009 to
YR 1,543 billion or 24.2% of GDP in
2010, thus assisting in absorbing pension
fund surpluses and excess liquidity in the
economy. Treasury bill initial auctions (in
the primary market) constituted the main
domestic debt instrument, contributing
38.3% of gross domestic public debt at
the end of 2010 compared with 41.2% in
the previous year. The purchase value of
outstanding treasury bills at the initial
auctions in the primary market was YR
591 billion at the end of 2010 against YR
526 billion in the previous year.
Repurchase operations (REPOs) of
treasury bills did not register any change
at the end of 2010 and remained at their
level in 2009 at YR 65 billion. After taking
into consideration government deposits at
the central bank, net domestic public debt
increased from YR 961 billion or 16.8% of
GDP at the end of 2009 to YR 1265
billion or 19.8% of GDP in 2010.
Distribution of Treasury Bills by Sub scribers:
The banking sector portfolio of treasury
bills on the basis of purchase value
increased from YR 452 billion in 2009 to
YR 494 billion in 2010, while the portfolio
of the non bank sector (pension funds,
public enterprises and the private sector)
increased from YR 74 billion in at the
end of 2009 to YR 97 billion at the end of
2010.
Distribution of Treasury Bills by Terms:
Out of the total purchase value of
treasury bills, the share of three month
treasury bills recorded a slight increase
from 61.3% at the end of 2008 to 61.4%
at the end of 2009. The share of six
month treasury bills rose from 15.6% to
16.3% . Correspondingly, the share of
one year bills fell from 23.1% to 22.3%
during the same period.
30
IV. External Public Debt
The outstanding external public debt
increased by 1.8% from US dollar 6,036
million at the end of 2009 to US dollar
6,142 million at the end of 2010. But as
a ratio of GDP, it fell from 21.5% at the
end of 2009 to 21.2% at the end of 2010,
which is considered one of the lowest
ratios in the Middle East. The debt
includes the loans rescheduled with the
Paris Club for long periods in 1996, 1997
and 2001, as well as the new facilities
contracted after that with the
international and regional institutions.
The net present value of the Yemeni
external public debt was only US dollar
4,593 million at the end of 2010
reflecting a concessionary rate of 25.2%.
The external debt service (interest and
amortization) fell from 3.6% of exports of
goods and service in 2009 to 2.7% in
2010. The external public debt may be
classified on donor basis into four
categories: international finance
institutions, Paris Club donors, non Paris
Club donors and other countries.
1. International Institutions
At the end of 2010, the outstanding debt
owing to this group of donors amounted
to US dollar 3,328 million or 54.2% of the
Domestic Public DebtDDDDDDDDDDDDDDDDooooooooooooooooommmmmmmmmmmmmmmeeeeeeeeeeeeeeeeessssssssssssssttttttttttttttiiiiiiiccccccccccccccccccc PPPPPPPPPPPPPPPuuuuuuuuuuuuuuubbbbbbbbbbbbbbbbbblllllliiiiiiiiiccccccccccccccccc DDDDDDDDDDDDDDeeeeeeeeeeeeeeeeebbbbbbbbbbbbbbbbbbttttttPPPPPP tttttttttttttt
(YR billions)
Items 2009 2010*
1- Overdrafts from Central Bank 313.5 473.9
2- Treasury Bills (Purchasing Value): 525.8 590.5
Banking Sector 451.9 493.7
Non-Banking Sector 73.9 96.7
3- Government Bills 372.6 413.7
Government Bills (Sold to YBRD) 2.3 2.3
Government Bills (Sold to CAC) 4.5 4.5
Government Bills (Sold to Pension funds ) 365.8 406.9
4- Re-Purchasing: 65.0 65.0
Banking Sector 65.0 65.0
Non-Banking Sector 0.0 0.0
5- Gross Domestic Public Debt 1276.9 1543.0
6- Government Deposits at the Central Bank -315.8 -278.1
7- Net Domestic Public Debt 961.0 1264.9
Distribution of Treasury Bills DiDiDiDiDDiDDiDDDDDD ststststststststririririririrrrrr bubbbububububbbubbb tititititititttt onononononoononoonnooo oooooooooofffffffff TrTrTrTrTrTrTTrTreaeaeaeaeaeaeaeaeaeeaaae susususususssssssss ryryryryryryryryyryy BBBBBBBBBBBiliiilillslslsssssssssffffffff T by Term Purchase Value
DiDDiDiDiDDDDDiD stststststssststtss ririrriririibubububububbububuububutittitittititiiononoonononononononn oooooooooff fffffff TrTrTrTrreaeaeaeaeaeaeaeeaaeaeaasususssususususususuuuryryryyyryryyryy BBBBBBBBBBililillililllllslsllssslssslslsslsbybybybybybybyybybybyyby TTTTTererererereerereereree mmmmmmmmmbybybybybybybbyybyyy TTTTTTTTTTTerererererererereeree mmmmmmmmmmm PuPuPuPPuPuPuPuPuuPuuurcrrccrcrcrccrrcchahahahahaahahahaaahahah seseseseseseseesesseeese VVV V V VVVVVVVVValaalalalaaalaalaala ueueueueueueueeeueuueuPuPuPuPPPuPPuPPPPP rcrcrcrcrcrcrcrccccchahahahahahahahhhhahaseseseseseseseseseee VVVVVVVVVVVVaalalalaaaa ueueueueueeeeeee
In Percent Billion Rials Time
2010 2009 2010 2009
65.8 61.4 388.4 322.8 3-months
15.2 16.3 89.7 85.9 6-months
19 22.3 112.4 117.1 12-months
100 100 590.5 525.8 Total
31
total outstanding external public debt.
The credits of international institutions
and particularly the International
Development Association do not bear
any interest and have long repayment
periods with a grace period of up to ten
years. Within this group, IDA is the
number one lender to Yemen with
outstanding loans amounting to US
dollar 2,180 million. The second lender is
the AFSED with loans totaling US dollar
697 million and the third is IFAD lending
US dollar 133 million. Then comes the
IDB with US dollar 105 million and then
the AMF with US dollar 99 million
followed by the IMF with US dollar 78
million. The remaining agencies in this
group are OPEC and the EC with US
dollar 32 million and 4 million
respectively.
2. Member countries of Paris Club
At the end of 2010, the outstanding debt
owing to this group of donors amounted
to US dollar 1,753 million or 28.6% of the
total outstanding external public debt.
Within this group, Russia is the number
one lender to Yemen with outstanding
loans amounting to US dollar 1,198
million. The second lender is Japan with
loans totaling US dollar 303 million and
the third is the United States lending US
dollar 98 million. Then comes France
with US dollar 82 million. The remaining
donors in this group are Italy, Spain,
Denmark, Netherlands and Germany with
total lending amounting to US dollar 73
million.
3. Non-Member Countries of
Paris Club:
At the end of 2010, the outstanding debt
owing to this group of donors amounted
to US dollar 579 million or 9.4% of the
total outstanding external public debt.
Within this group, the Saudi Fund is the
number one lender to Yemen with
outstanding loans amounting to US
dollar 374 million. The second lender is
Kuwaiti Fund with loans totaling US
dollar 149 million and the third is the
Korea Fund lending US dollar 29 million.
Then comes Poland and the Iraqi Fund
with total lending amounting to US dollar
27 million.
4 . Other Donors
At the end of 2010, the outstanding debt
owing to this group of donors amounted
to US dollar 482 million or 7.9% of the
total outstanding external public debt.
32
External Public Debt as at 31st December 2010
(milion US$)
Grant Element %
Present Value 31/12/2010 % Outstand-ing
Incl. Arrears Creditor
17.77 1441.7 28.55 1,753.3 Paris Club Countries
20.94 947.1 19.50 1,197.9 Russian Federation
10.23 272.3 4.94 303.3 Japan
0.54 97.0 1.59 97.5 U.S.A
20.34 65.0 1.33 81.6 France
20.98 35.1 0.72 44.4 Italy
18.62 17.7 0.35 21.8 Spain
0.11 2.7 0.04 2.7 Denmark
-18.23 2.9 0.04 2.5 Holland
-17.20 1.9 0.03 1.6 Germany
26.97 422.6 9.42 578.6 Non-Paris Club Countries
28.44 267.6 6.09 373.9 Saudi Arabia
24.91 112.2 2.43 149.4 Kuwait Dev. Fund
37.10 18.0 0.47 28.6 Korea
0.00 13.7 0.22 13.7 poland
14.60 11.1 0.21 13.0 Iraqi Dev. Fund
57.29 205.8 7.85 482.0 Other
24.20 2,522.5 54.18 3,327.8 Int'l & Regional Financing Institutions
30.09 1,523.9 35.49 2,179.8 IDA
4.04 669.2 11.35 697.3 AFESD
27.31 96.9 2.17 133.2 IFAD
22.58 81.4 1.71 105.2 Islamic Dev. Bank
11.46 87.9 1.62 99.3 IMF
61.79 29.7 1.27 77.8 AMF
3.70 30.3 0.51 31.5 OPEC
12.07 3.1 0.06 3.6 EEC
25.22 4,592.6 100 6141.6 Grand Total
�
�
�
�
��
35
I. Monetary, Credit and Banking
Sector Developments:
1. Monetary Policy:
In order to curb the pressures on
the exchange rate the benchmark
minimum interest rate increased
three times from 10% in May 2009
to 20% in March 2010.
Deposit Interest rate Date
12% January 17,2011
15% March 17,2011
20% March 29,2011
The level of the interest rates on
the Yemeni Rial , although still high
in comparison with major foreign
currencies , is acceptable for
purposes of monetary policy .
In order to achieve the main aim of
monetary policy, which is price
stability, the Central Bank closely
monitored the developments in
economic activity in order to
determine the suitable level of
domestic liquidity and then
undertake the necessary measures
to reach that level. Statutory
reserve requirements
were maintained without change at
7% on rail and 20% on foreign
currency deposits without interest
paid on these reserves to curb
dollarization .
The Central Bank intervention in
the foreign exchange market by
selling foreign currencies declined
from US $1,995 million in 2009 to
US $ 1,466 million in 2010. The
aim of this policy is to replenish the
market with its needs of foreign
currencies as well as to absorb
excess liquidity for the maintenance
of price stability.
2. The Exchange Rate
The freely exchange rate system has
been the regime adopted by Yemen
for more than a decade and the
Central Bank intervenes to influence
the direction of the exchange rate
only in the case of short term wide
fluctuations in the exchange market,
which are unwarranted by economic
fundamentals .
36
This policy has contributed to the
build-up of foreign reserves. The
Republic of Yemen has accepted
Article VIII of the IMF Agreement
since December 1996, after which
the country has maintained an
exchange rate regime free of controls
on current and capital payments.
The US dollar increased by 3.1%
against the Yemeni Rial in 2010
from YR 207.32 at the end of 2009
to YR 213.80 at the end of 2010.
The dollar in 2010 strengthened by
2.4% and 9.3% against the GBP
and Euro ,and fell by11.6% against
the Japanese Yen.
3. Money Supply and Factors affecting it
The increase in domestic liquidity in
2010 was YR 191 billion or 9%,
compared with an increase of YR
198 billion or 11% in 2009. The
expansion in domestic liquidity in
2010 was the result of an increase
in the net domestic assets of the
banking system of YR 290 billion,
combined with a decrease in the
net foreign assets of the banking
system amounting to YR99 billion.
Monetary Survey
(YR Billions) 2010 2009 Items
2266.7 2075.7 Broad money
786.1 758.3 Money
546.8 532.3 Currency Outside Banks
239.3 226.0 Demand Deposits
702.6 687.4 Quasi Rial Money
778 630.0 Deposits in Foreign Currency
1693.1 1791.7 Net Foreign Assets
1216.4 1389.6 Central Bank of Yemen
476.8 402.1 Commercial Banks
573.6 284.0 Net Domestic Assets
780.5 532.9 Credit to Government (net)
780.5 532.9 Total budget financing (Net)
539.3 499.6 Credit to Non-governmental
438.3 404.1 Private Sector
101 95.5 Public enterprises
746.2-
748.5-
Other items (Net) % of Broad money of previous year
-4.8 3.5- Net Foreign Assets
13.9 14 Net Domestic Assets
11.9 23.4 Total budget financing (Net)
1.6
0.6-
Credit to private sector % of previous year
9.2 10.6 Broad money
3 7.7 Rial broad money
8.5 4.6- Credit to private sector
37
The main factor behind the fall in
the net foreign assets of the
banking system is the increase of
C.B.Y financing of petroleum
products imports for local
consumption amounting to US $
1,753 million in 2010 .
The increase in net domestic
assets in 2010 was the end product
of the rise in budget financing by
YR 248 billion , the expansion in
credit to non-Government sectors
by YR 40 billion and the increase
in net other items by YR 2 billion.
The deficit in the position of the
budget with the banking system
declined from YR 439 billion in 2009
to YR 248 billion in 2010.This was
caused by the increase in the
government's share in crude oil and
gas production . The increase in net
other items was in part due to the
movements in exchange valuations.
In 2010, M1 grew by YR 28 billion
while quasi-money by YR 163 billion.
M1 growth was the result of an
increase of YR 15 billion in currency
in circulation and YR 13 billion in Rial
demand deposits. The growth in
quasi money in 2010 was caused by
the increase of YR 15 billion in Rial
saving , earmarked and time pension
fund deposits and YR 148 billion in
foreign currency deposits.
The ratio of currency in circulation to
Rial broad money was maintained
without charge at 37%, while Rial
quasi money fell from 48% in 2009 to
47% in 2010. Foreign currency
deposits rose from 30% of broad
money in 2009 to 34% in 2010.
II. Central Bank Activities
1. Central Bank Balance Sheet
The Central Bank Balance sheet
total decreased slightly by 0.6%
from YR 1,857 billion at the end of
2009 to YR 1,846 billion at the end
of 2010, compared with an decline
of 0.4% in 2009.
(A) Assets The net foreign assets of the
Central Bank decreased by 13%
from YR 1,390 billion at the end of
2009 to YR 1,216 billion at the end
of 2010, compared with an decline
of 12% the previous year. Gross
foreign assets declined as a ratio of
total assets from 77 % at the end of
2009 to 69% at the end of 2010.
38
Net claims on Government rose by
1,431 % in 2010 compared with
108% in 2009. This is attributable
to the increase in public
expenditures.
(B) Liabilities Reserve money (currency outside
banks and with banks and bank
balances with the Central Bank)
increased by 8% from YR 765
billion at the end of 2009 to YR 824
billion at the end of 2010,
compared with an increase of 11 %
the previous year. The change in
reserve money in 2010 was the end
product of an increase of YR 19
billion in currency issued and YR
40 billion in bank balances with the
Central Bank, caused by a rise in
bank deposits both in local and
foreign currencies.
Public sector enterprises’ deposits
rose by 9 % in 2010 against an
increase of 18 % in 2009. Pension
fund deposits, mostly in foreign
currencies, declined from YR 76
billion in December 2009 to YR 65
billion in December 2010. Net
other items declined by 8% in 2010
compared with an increase of 35%
Balance Sheet of Central Bank of Yemen
(YR Billions)
2010 2009 Description
1270.2 1435.2 Foreign Assets
575.4 421.5 Domestic Assets
477.5 329.2 Claims on Government
82.9 79.6 Claims on Public Enterprises
- - Claims on Banks
15 12.7 Fixed and Other Assets
1845.6 1856.8 Assets = Liabilities
823.9 765.1 Reserve money
571 551.7 Currency in Circulation outside banks
252.9 213.4 Banker’s Deposits
278.1 315.8 Government Deposits
136.2 125.3 Public Enterprises Deposits
65.4 76 Social Security Funds Deposits
0 0 Certificates of Deposit
53.8 45.6 Foreign Liabilities
488.2 528.9 Other Liabilities
43.4 39.7 Capital and Reserve
240.5 242.2 Foreign Exchange Valuation
76.1 75.5 SDR Allocations
128.2 171.4 Other Liabilities
39
in 2009, partially owing to a fall in
foreign currency valuation account .
(C) Central Bank Net Profits Central Bank net profits amounted
to YR39 billion in 2010 compared
with RY 33.2 billion in 2009, an
increase of 17 % . The revenues
increased from YR 55.4 billion in
2009 to YR 62.6 billion in 2010, an
increase of 13%.
The expenditure rose by 6% from
YR 22.2billion in 2009 to YR 23.6
billion in 2010.
(D) Currency Issued Currency issued amounted to
YR571 billion in 2010, which is
3.5% higher than what it was in
2009, while in 2009 it was 12.5%
higher than what it was in 2008.
Concerning the distribution by
denomination, the YR 1,000 note
represented 68 % of the currency
issued in terms of value, followed
by the YR 500 note (25 %), then
YR 250 , YR 100 and YR200 notes
(3% ,2% and 1% respectively), and
the remaining 1% for the lower
denominations (YR 50, 20, 10 and
5). The increase in the shares of
the YR 1,000 and YR 500
denominations has facilitated the
processes of counting, sorting,
transporting and warehousing the
banknotes.
(E) The Clearing House In 2010, the number of cheques
cleared and settled at the clearing
rooms of the Central Bank was
678,000 cheque amounting to YR
2,175 billion. These figures were
lower than in 2009 by 3 % in
number and higher by 6 % in value
respectively. Returned cheques
were 21,300 cheque amounting to
YR 69 billion in 2010, compared
with 21,600 cheque amounting to
YR 55 billion in 2009. The ratio of
returned cheques to cleared
cheques value rose from 2.7% in
2009 to 3.2% in 2010.
After introducing clearing services
in U.S. dollar starting 2004, about
56,000 cheque were transacted
with a total value of US$2,074
million in 2010, against 50,000
cheque with a total value of US$
1,660 million in 2009, i. e. an
increase of 12% in number and
25% in value.
40
III. The Banking Sector
1. Commercial and Islamic Banks consolidated Balance Sheet:
The consolidated balance sheet of
the commercial and Islamic banks
increased in 2010 by 15 % to reach
a total of YR 1934 billion,
compared with an increase of 19%
in the previous year.
(A) Assets Net foreign assets increased in
2010 by 19 % to reach a level of
YR 477 billion, compared with an
increase of 45 % in the previous
year. As a ratio of total assets,
gross foreign assets increased from
25.5 % in the end of 2009 to 26.4
% at the end 0f 2010.
Bank reserves (currency in bank
vaults and balances at the Central
Bank) rose by YR 43 billion or 18%
in 2010 to reach a level of YR 276
billion compared with YR 233 billion
at the end of 2009. This is
attributed to the increase in
deposits in local and foreign
currencies.
As a ratio of total deposits , bank
reserves rose from 17% in2009 to
18% in 2010 .
Loans and advances grew by 10%
in 2010 to YR 1,038 billion . This is
mainly attributable to the increase
in gross claims on government by
12%.
Private sector credit in 2010, YR
amounted 483 billion ,which was
8.5% higher than the previous year.
Bank intermediation is still limited in
Yemen, as private sector credit did
not exceed 23% of total assets at
the end of 2010, while 69% of
these assets are placed in risk free
investment , consisting of foreign
assets (26%), treasury bills(30%)
and Central Bank balances (13%).
(B) The Liabilities Total deposits in 2010 increased by
13 % to YR 1,519 billion (excluding
non-resident deposits), compared
with a growth of 9 % in the previous
year. Rial demand deposits, rial
quasi money deposits and foreign
currency deposits grew by 6 %, 4
% and 25% respectively, reflecting
the spread of bank habit.
41
Net other liabilities increased by 17
% to YR 271 billion in 2010, against
an increase of 16 % the previous
year, reflecting mainly the efforts of
the Central Bank aiming at
strengthening the capital adequacy
of banks.
2. Deposit structure:
Time deposits in local currency
increased by 11% in 2010, compared
with 9.5% in 2009. Saving deposits
also in Rials, grew by 5 % in 2010,
against 8% in 2009. Rial demand
deposits also rose by 6% in 2010,
while in 2009 they recorded an
increase of 9%. Rial Earmarked
deposits declined by 42% in 2010,
compared with a decrease of 32.5%
in the previous year.
Foreign currency deposits grew by
25 % in 2010 against a growth of
16 % in 2009. On the other hand,
Yemeni Rial total deposits
increased by 5% in 2010 against 4
% in 2009. This led to the rise of
foreign currency deposits as a ratio
of total deposits from 42 % at the
end of 2009 to 46 % at the end of
2010.
Consolidated Balance Sheet of Commercial and Islamic Banks
(YR Billions)
2010 2009 Description 510.3 427.9 Foreign Assets 40.3 28.4 - Foreign currency 233.4 244.4 - Balances with banks abroad 236.6 155.2 - foreign investment 275.5 232.9 Reserves 24.1 19.3 - Local currency 251.4 213.6 - Deposits with Central Bank
0 0 Certificates of Deposit 1038 939.9 Loans and Advances 438.3 404.1 - Private Sector 18.1 15.9 - Public enterprises 581.5 519.9 - Government 110 75.8 Other Assets
1933.8 1676.5 Assets = Liabilities 33.6 25.8 Foreign Liabilities 31.2 22.9 - Deposits of foreign banks 2.4 2.9 - Nonresidents deposits
1518.8 1342.4 Deposits 175.6 165.9 - Demand Deposits 472.3 425.7 - Time Deposits 128.8 123.1 - Savings Deposits 36.1 62.6 - Earmarked Deposits 705.5 564.8 - Foreign Currency Deposits 0.5 0.3 - Government Deposits
381.4 308.3 Other Liabilities 176.5 143.3 Capital and Reserves 204.9 165.0 Other Liabilities
42
3 .Credit facilities
The total outstanding balance of
credit facilities offered to the private
sector by commercial and Islamic
banks decreased by 8.5 % in 2010,
against a fall by 5 % in the previous
year. Trade finance declined from 61
% of total credit facilities in 2009 to
42%in 2010. Agriculture and fisheries
maintained its share without change
at 1.7%. The share of industry fell
from 18%,in 2009 to 14% in 2010.
Finance allotted to construction rose
from 5 % in 2009 to 8 % in 2010.
Classified loans and advances, for
which provisions must be made,
maintained its share without change
at 14 %. These provisions amounted
to 78 % of the classified loans, which
is a high ratio designed to protect the
Yemeni banking system from facing
non-performing loan crises.
Short term loans and advanced
increased from 34% of total facilities
in 2009 to 35% in 2010, while
medium and long term loans rose
from 10% in 2009 to 13% in 2010.
The investments of Islamic banks
declined from 42 % of total credit in
2009 to 38 % in 2010..
II- Commercial Banks Consolidated Balance Sheet: The consolidated balance sheet of
the commercial banks increased in
2010 by 15% to reach a total of YR
1,302 billion , compared with an
increase of 6% in the previous
year.
commercial banks maintained their
share as a ratio of the consolidated
balance sheet of the consolidated
balance sheet of the commercial and
Islamic banks decreased at 67% .
(A) Assets Net foreign assets increased in 2010
by 12% to reach level of YR 185
billion, compared with an increase of
51% in the previous year. As a ratio
of total assets, gross foreign assets
maintained its share at 16%. As a
ratio of net foreign assets of
commercial banks fell from 41% in
2009 to 39% in 2010.
Bank reserves (currency in bank
vaults and balances at the Central
Bank) increased by YR 21 billion or
14% in 2010 to reach a level of YR
173 billion compared with YR 152
billion at the end of 2009. This is
attributed to the increase in the
43
deposits with central bank .As a
ratio of total deposits , bank reserve
maintained its share without charge
at 16%.
Loans and advances grew by 13%
in 2010 to YR 849 billion. This is
mainly attributable to the increase
in gross claims on government by
12%. Private sector credit in 2010,
YR 249 billion , was 15.5% higher
than in the previous year.
(B) Liabilities Total deposits in 2010 increased by
13% to YR 1,066 billion( excluding
non-resident deposits), compared
with a growth of 5% in the previous
year. . Rial demand deposits, Rial
quasi money deposits and foreign
currency deposits grew by 9%, 9%
and 19% respectively , reflecting
the spread of bank habit.
Net other liabilities increased by
11% to YR 140 billion in 2010,
against a growth of 14% the
previous year , reflecting , in part ,
the efforts of the Central Bank
aiming at strengthening the capital
adequacy of banks.
Consolidated Balance Sheet of Commercial Banks
(YR Billions)
2010 2009 Description 210.6 187 Foreign Assets 187 170.5 - Balance with banks abroad 0 0 - Claims on nonresidents
23.6 16.5 - Others 173.2 152.2 Reserves
15 11.3 - Local currency 158.2 140.9 - Deposits with Central Bank
0 0 Certificates of Deposit 848.6 751.3 Loans and Advances 249 211.3 - Private Sector 18.1 20.1 - Public enterprises 581.5 519.9 - Government 69.6 41.5 Other Assets 1302 1132 Assets = Liabilities 25.6 22.3 Foreign Liabilities 23.2 19.3 - Deposits of foreign banks 2.4 3.0 - Nonresidents deposits
1066.4 942.3 Deposits 139 127.3 - Demand Deposits
368.9 309.2 - Time Deposits 94.4 85.7 - Savings Deposits 31.9 57.4 - Earmarked Deposits 432.2 362.7 - Foreign Currency Deposits 0.08 0.1 - Government Deposits 210 167.5 Other Liabilities
107.3 90 Capital and Reserves 102.6 77.5 Other Liabilities
44
(C) Deposit Structure of Commercial Banks
Time deposits in local currency
increased by 19% in 2010,
compared with 3% in 2009 . Saving
deposits , also in Rial , grew by 10%
in 2010,against 6% in 2009. Rial
demand deposits maintained the
same growth rate without change
by 9%. Rial earmarked deposits fell
by 44% in 2010, compared with a
decline of 35% 2009.
Foreign currency deposits grew by
19%in 2010, against a growth of
17% in 2009. On the other hand ,
Yemeni Rial total deposits
increased by 9%in 2010 against a
slight decline by 1% in 2009 . This
led to the rise of foreign currency
deposits as a ratio of total deposits
as a ratio of total deposits from
38.5% in 2009 to 40.5% in 2010.
III- Islamic Banks Consolidated Balance Sheet: The consolidated balance sheet of
the Islamic banks increased in
2010 by 16% to reach a total of YR
632 billion, compared with an
increase of 15% in the previous
year . As aratio of the Commercial
and Islamic banks consolidated
balance sheet, Islamic banks
maintained their share at 33%
without change.
(A) Assets Net foreign assets increased in
2010 by 23% to reach a level of YR
292 billion , compared with an
increase of 41% in the previous
year . As a ratio of total assets ,
gross foreign assets increased from
44% at the end of 2009 to 47% at
the end of 2010.
As a ratio of total assets, gross
foreign assets increased from 44%
at the end of 2009 to 47% at the end
of 2010. As a ratio of net foreign
assets of Commercial and Islamic
banks, the share of Islamic banks
ross from 59% in 2009 to 61% in
2010. Bank reserves (currency in
bank vaults and balances at the
Central Bank) increased by YR 21
billion or 27% in 2010 to reach a
level of YR 102 billion compared with
YR 80 billion at the end of 2009.
Loans and advances maintained
their level at YR 189 billion without
change, compared with a growth by
9% 2009.
45
(B) Liabilities Total deposits in 2010 increased by
13% to YR 452 billion, compared
with a growth of 19% in the
previous year. This is attributed to
the growth of foreign currency
deposits .
Net other liabilities increased by
23% to YR 131 billion, against an
increase of 18% the previous year ,
reflecting, in part, the efforts of the
Central Bank aiming at
strengthening the capital adequacy
of banks .
(C) Deposit Structure of Islamic Banks
Foreign currency deposits grew by
35% in 2010 against a growth
of16%in 2009 . On the other hand ,
Yemeni rial total deposits declined
by 10% against a growth of 22% in
2009 . This led to the rise of foreign
currency deposits as a ratio of total
deposits from 50.5% at the end of
of 2009 to 60% at the end of
2010. As a ratio of Commercial and
Islamic banks deposits , Islamic
banks maintained their share at
30% without change .
Consolidated Balance Sheet of Islamic Banks
(YR Billions)
2010 2009 Description 299.8 240.9 Foreign Assets 46.4 73.8 - Balance with banks abroad
235.0 154.2 - Foreign investment 18.3 12.9 - Others
102.3 80.7 Reserves 9.1 8 - Local currency 93.2 72.6 - Deposits with Central Bank
0 0 Certificates of Deposit 189.3 188.6 Loans and advances 189.3 188.6 - Private Sector 0.0 0.0 - Public enterprises 0 0 - Government
40.4 34.3 Other Assets 631.8 544.5 Assets = Liabilities 8.0 3.6 Foreign Liabilities 8.0 3.6 - Deposits of foreign banks 0.0 0.0 - Nonresidents deposits
452.4 400.2 Deposits 36.6 38.7 - Demand Deposits
103.4 116.5 - Time Deposits 34.4 37.4 - Savings Deposits 4.2 5.2 - Earmarked Deposits
273.3 202.1 - Foreign Currency Deposits 0.4 0.3 - Government Deposits
171.5 140.7 Other Liabilities 69.2 53.4 Capital and Reserves
102.3 87.4 Other Liabilities
46
4 .Bank Branches In order to spread the banking habit and expand the provision of bank services, several new bank branches and offices were opened in 2010 as is shown in the following table. New licences were issued by the Central Bank for money changers and bureaux de change all over the country .The number of these licenses amounted to 601 in 2010 compared with 618 in 2009 and below is a table showing the number of licences granted in the various Governorates of the Republic. Many ATMs were established.
5. Payment system 2010 witnessed many developments
in the payments system . Many
ATMs were established .
The number of ATMs installed in the country grew by 22% from 365 in 2009 to 446 in 2010. The number ATMs operations increased in 2010 by 29% , compared with 36% in 2009 . POS amounted to 1887 in 2010 against 2148 in 2009. The number of POS operation grew by 10%in 2010 , compared with 7% in the previous year . Bank cards rose in 2010 by 15.5% , compared with 42% in 2009.
New Branches of Banks in 2010
Bank Date of in inauguration
New branches/office Bank
23/03/2010
A- New Branches
Sayun-Qatn
International Bank of Yemen.
B- New Offices
29/04/2010 Ibb-Odain Yemen
Commercial Bank
07/11/2010 09/11/2010
Sana’a-Khawlan Aden-Free Zone
International Bank of Yemen.
12/05/2010 11/07/2010
Haradh Taiz-26 Sep.st.
Tadamon International Islamic Bank
Payment System Indicators
2010 2009 2008 Year
446 365 300 ATMs
1,887 2,148 2,086 POS
681,215 589,858 414,448 Bank Cards
9,827,889 7,620,788 5,620,478 Number of ATMs operation
150,548 112,301 83,769 Value of ATMs operation
932,986 846,032 790,815 Number of POS operation
26,140 24,550 17,143 Value of POS operation
Number of License Granted to Money Chargers in 2010
Number of licenses granted
Governorate Number of licenses granted
Governorate
1 Al-Mahweet 231 Capital secretariat
6 Al-Mahra 48 Aden
10 Dhale 59 Taiz
14 Dhamar 53 Ibb
10 Abyan 34 Hodeidah
9 Amran 30 Hajja
8 Lahj 25 Mukalla
6 Mareb 17 Sayun
12 Sadda 13 Shabwa
1 Raima 14 Al-Beidha
601 Total
�
��
51
I. Balance of Payments
Preliminary data of 2010 indi-
cate that the overall balance of
payments realized a deficit of
US$905.3 million, against a deficit
of US $1,289.9 million in 2009. The
ratio of the overall deficit to GDP
declined from 4.5% in 2009, to
3.1% in 2010 . The deficit in the
balance of payment is mainly at-
tributed to the deficit in the current
account which amounted to
US$ 1,209.1 million in 2010,
against a deficit of US$ 2,564.9
million last year .
The ratio of the account deficit
to GDP fell from 9% in 2009 to
4.2% in 2010 due to improved ex-
ports of oil and gas . The capital
account recorded a deficit of US$
123.7 million in 2010 , against a
deficit of US $ 312.3 million last
year. The ratio of capital account
deficit to GDP declined from 1.1%
in 2009 to 0.4% in 2010 . For more
analysis , the main indicators and
items of balance of payments shall
be discussed hereunder.
Main Indicators of Balance of Payments As a Ratio of Gross Domestic Product (1)
2010** 2009* Item
4.2- 9.0- Current Account
3.4- 7.1- Trade Balance
26.6 20.5 Exports
30- 27.6- Imports
2.4- 3.1- Services (Net)
6.2- 4.1- Income (Net)
7.8 5.3 Current Transfers (Net)
0.4- 1.1- Capital Account (Net)
3.1- 4.5- Overall Balance
*- At Current Prices ** -Preliminary Data
52
A - Current Account: Current account represents
transactions that pertain to goods,
services, income and current trans-
fers. Current account deficit de-
creased from S$ 2,564.9 million in
2009 to S$ 1,209.1 million in 2010.
Ratio of this deficit to GDP at current
prices amounted to 4.2% in 2010,
against 9% last year.
Goods and Services:
The deficit in goods and ser-
vices balance fell from US$2,908.5
million in 2009 to US$1687.9 mil-
lion in 2010. The fall is attributed to
the decrease in trade deficit, due to
the rise in world oil and the com-
mencement of LNG exports.
Trade Balance :
In 2010, the trade balance rec-
orded a deficit of US $ 982.4 mil-
lion, against a deficit of US$
2012.8 million in 2009. Ratio of this
deficit to GDP declined from 7.1%
in 2009 to 3.4% in 2010. The de-
clined in the trade deficit is at-
tributed to the rise of oil and gas
exports .
Exports:
The value of exports increased
from US$ 5,855 million in 2009 to
US$ 7,718.1 million in 2010, i.e. an
increase of US $1863.1 million, or
31.8% over that of last year. Ratio of
exports to GDP amounted to 26.6%
compared with 20.5% last year.
Oil and Gas Exports:
Total value of oil and gas ex-
ports in 2010 amounted to US$
6,348.8 million, forming 82.3% of
the total value of exports. Oil and
gas exports rose from US$4,432.4
million in 2009 to US$ 6,348.8 mil-
lion in 2010, i.e. a rise of
US$1,916.3 million, or 43.2% over
last year, basically attributed to the
rise in international oil prices and
commencement of LNG exports.
On excluding the share of oil com-
panies, Government’s share of oil
and gas export increased by
40.3% from US$1,958.8 million in
2009 to US$2,748.9 million in
2010, attributable to the increase in
average export prices and quanti-
ties exported.
53
Imports:
Imports decreased by 10.6%,
from US$7,867.8 million in 2009 to
US$8,700.5 million in 2010 com-
pared with a decline of 15.7% last
year . Its ratio to GDP increased
from 27.6% in 2009 to 30% in 2010.
2 - Services (Net):
Deficit in the services balance de-creased by US$190.2 million, or 21.2% amounting to US$705.5 mil-lion during 2010 against US$ 895.7 million during 2009. This is at-tributed to the rise of total receipts by US$ 373.8 million from US$ 1,237.2 million during 2009 to US$ 1,611.0 million during 2010. It is worth mentioning that the ratio of total receipts to net services in 2010 amounted to 228.3% . The decrease in the deficit is basically attributed to the rise of receipts of travel and government services and the fall of payments of trans-portation services.
3 - Income (Net):
Deficit in the income balance in-
creased by 54.7% from US $
1,171.3 million during 2009 to US
$1,812.1 million during 2010. This
is attributed to the rise of total
payments by US $ 586.5 million
from US$1,286.3 million during
2009 to US $ 1,872.8 million dur-
ing 2010 as a result of the in-
crease of the earnings of foreign
direct investment remitted to
abroad. Moreover, total receipts
declined by US$ 54.3 million dur-
ing 2010 ,due to the decrease in
portfolio and other investment in-
come.
4 - Current Transfers (Net):
Net Current transfers balance
surplus recorded an increase of
US$ 776 million from US$
1,514.9 million in 2009 to US$
2,290.9 million in 2010. Receipts
grew by US$ 918.8 million in
2010 compared with a decline of
US$ 594.7 million during 2009 .
This is attributable to the rise in
government transfers receipt by
US$435.5 million and the in-
crease in receipts from transfers
of other sectors by US$340.4 mil-
lion in 2010.On the other hand,
current transfers payments rose
by US$142.9 million in 2010,
54
compared with an increase of
53.6 million in 2009.
B - Capital and Financial Account:
This account forms the second
component of the balance of
payments and represents the
government and private capital
movements, represented by for-
eign loans drawings, amortization
payments and movements of
Government and private invest-
ments. In 2010, this account rec-
orded a deficit of US$ 123.7 mil-
lion, against a deficit of US$
312.2 million in 2009 . Ratio of
the deficit in the capital and fi-
nancial account to GDP declined
from 1.1%in 2009 to 0.4% in
2010. Foreign direct investment
realized a surplus of US$55.7 mil-
lion in 2010, against a surplus of
US$129.2 million in 2009. The
surplus decline is attributed to the
rise of of foreign oil companies
cost recovery. The position of
other investments recorded a def-
icit of US$ 179.4 million in 2010
compared with a deficit of US$
441.5 million in 2009. The deficit
fall is due to the decline of growth
rate of net foreign assets of
Commercial and Islamic banks
and the decrease of net short-
term trade credits given to crude
oil importers. As for drawings
from foreign loans, it amounted to
US$ 336 in 2010 and its ratio to
GDP amounted to 1.2% against
1.1% in the year 2009. Amortiza-
tion obligations in 2010 amounted
to US$ 248.9 million, and its ratio
to GDP amounted 0.8%, com-
pared with 0.5% in the previous
year.
C - Overall Balance: Overall balance recorded a
deficit of US$ 905.3 million in
2010, and represented about
3.1% of GDP, against a deficit of
4.5% of GDP last year. The defi-
cit fall is mainly due to the rise in
world oil prices and the increase
of LNG quantities exported. This
was reflected on net foreign as-
sets of the Central Bank which
has recorded in 2010 a smaller
decline than the previous years.
55
2010* 2009* Item
838.7 403.2 General Government
1,452.2 1111.8 Other Sectors
-123.7 312.3- Capital and Financial Account
-123.7
312.3- 1- Financial Account
55.7 129.2 1-1 Direct Investment
55.7 129.2 of which : oil companies invest-ment
2,145.8 1676.3 Inflows -
2,090.1 1547.1- Outflows
-179.4 441.5- 1-2 Other Investment
87.1 180.6 Government Loans (Net)
336.0 325.9 Drawings
-248.9 145.4- Amortization Obligation
23.8 66.9- Trade Credit
-290.4 555.1- Commercial Banks
0.0 0.0 Other Sectors
427.5 1587.3 Errors and Omissions
-905.3
1289.9- Overall Balance
905.3
1289.9
Financing S
810.7 1283.9 a- Net Reserves (Increase -)
830.8 1324.4 Reserve
-20.1 40.5- Monetary Authorities Liabilities
-27.4 43.6- International Monetary Fund Loans (Net)
0.0 0.0 Arab Monetary Fund Loans (Net)
7.2 3.1 Liabilities constituting Reserves of Foreign
Monetary Authorities
94.5 6.0 b- Debt Relief and Arrears
** Preliminary
2010* 2009* Item
-1,209.1 2564.9-Current Account:
1,687.9- 2908.5-Goods and Services
-982.4 2012.8-1 Trade Balance
7,718.1 5855.0 Exports:
6,348.8 4432.4 Crude Oil
2,748.9 1958.8 Government Share
3,599.9 2473.6 Companies Share
-8,700.5 7867.8-Imports
-705.5 895.7- 2 Services (Net)
1,611.0 1237.2 Credit
-2,316.5 2132.8-Debit
-873.6 896.3- Transportation
978.2 684.9 Travel
80.7 80.7 Communication
-339.7 -266.7 Construction Services
-194.6 175.8- Insurance
-417.6 413.1- Other Business Services
97.6 57.4 Government Services
-1,812.1 1171.3-3- Income (Net)
60.7 115.0 Credit
-1,872.8 1286.3-Debit
-1,509.8 926.5- Direct Investment Income
-13.7 43.8 Portfolio and Other Investment In-come
2,290.9 1514.9 4 Current Transfers (Net)
2,547.1 1628.3 Credit
-256.2 113.4- Debit
Balance of Payment )US$ Millions(
56
II – Foreign Trade:
Statistics of Foreign Trade be-
tween Yemen and the rest of the
world during 2010 showed an ac-
ceptable development despite re-
gional and international uncertain-
ties.
A. Trade Balance: Trade balance recorded a defi-
cit of YR 605.8 billion in 2010,
compared with a deficit of YR 592
billion in the previous year. The
small increase in the deficit is at-
tributable to the rise of imports by
a higher amount than the increase
of exports. Imports grew by
YR147 billion in 2010 to reach
YR2009 billion in 2010, while ex-
ports rose by YR133 billion during
2010 to a level of YR1403 billion.
B - Commodity Composition of Foreign Trade:
1. Exports
Exports and re-exports in-
creased by 10.5% in 2010 com-
pared with a decline of 16% last
year . This attributable to the
growth of indigenous exports by
10% in 2010.The rise in exports
and re-exports was the end
product of the increase of world
oil prices and the commence-
ment of LNG exports . Re-
exports during 2010 grew by
18%, and its ratio to GDP main-
tained the same level at 0.8%
without change . Analyzing the
commodity composition of ex-
ports by SITC:
Trade Balance
(YR Billions)
2010 2009 Item
-605.8 -591.9 Trade balance 1,403.3 1,270.1 Exports(1) 2,009.1 1,861.7 Imports
Source: Central Statistical Organization. 1- Including Re-Exports
57
� Oil and its products: recorded an
increase of 9% during 2010,
compared with a fall of 15.5%
last year, attributable basically to
the rise of international oil prices
and the increase of LNG quanti-
ties exports .
� Non-oil raw materials: recorded
an increase of 33 % in 2010,
compared with a decline of 22%
last year. This attributed to the
rise of exports of food stuffs.
� Manufactured goods: recorded a
rise of 14.5% during 2010, com-
pared with a fall of 50 % last year.
This is attributed to the increase
of exports of machinery &
transport equipment and unclassi-
fied commodities during 2010.
2. Imports:
Imports during 2010 grow by
8 %, compared with a decline of
11% during 2009. This is mainly
due to the increase in imports of
oil and food stuffs.
Analyzing the commodity composition of imports by SITC: � Oil and its products: recorded a
rise of 8% in 2010, compared
with a decrease of 35.5 % last
year.
� Non-oil raw materials: realized
an increase of 17 % in 2010,
compared with a decline of 0.2%
last year. This is mainly due to
the rise of imports of foodstuffs.
� Manufactured goods: recorded
an increase of 2% during 2010,
compared with a fall of 1 % last
year. This is attributed to the rise
of imports of chemicals and
classified manufactures.
C- Foreign Trade by Economic Blocks:
1. Exports:
The relative share of non-
Arab Asian counties increased
from 76% in 2009 to 78% in
2010, due to a rise in exports
value by 12.5% during 2010 .
Next came Arab countries,
which maintained its share at
14% without change, despite a
rise of export value by 12% dur-
ing 2010. The share of non-Arab
African countries fell from 7 % in
2009 to 0.4% in 2010 , as a re-
sult of a decline of export value
by 93% .the relative share of EU
58
countries increased from 2% in
2009 to 5% in 2010, attributed to
a rise of export value by 223%
during 2010 . Exports to Ameri-
can countries grew by 756% dur-
ing 2010. As a result , its relative
share increased from 0.3% in
2009 to 2.5% in 2010.
2. Imports:
One of the main develop-
ments in the geographical distri-
bution of imports is the rise of
imports from Arab Countries by
14% during 2010, mostly im-
ported from GCC countries. Ac-
cordingly , their share increased
from 35% in 2009 to 37% in
2010 .Next came Non-Arab
Asian countries , which main-
tained their share without
change at 26% although their
import value increased by 5%.
Next came EC countries which
increased their share from 13%
in 2009 to 16.5% in 2010, as a
result of a rise of import value by
38% during 2010. Next came
American Countries which main-
tained their imports value with-
out change and decreased their
relative share from 13% in 2009
to 12% in 2010. Next came oth-
er European countries, which
recorded a decline in their im-
port value by 30% in 2010. Ac-
cordingly , their relative share fell
from 7% in 2009 to 4% in 2010.
Australia and Pacific witnessed a
decrease in relative share from
4% in 2009 to 2% in 2010, due to
a decline in import value by 37%
during 2010.
D - Foreign Trade by Countries:
1. Exports:
The rise of exports , especially oil
and gas exports, during 2010 has a
positive effect on the volume of
trade with some of Yemen’s trade
partners. India ascended from the
second to the first rank of importers
from Yemen, where its relative
share increased from 20% in 2009
to 34% in 2010, as a result of a rise
in export value by 86% .China re-
treated from the first to the second
position, where its relative share fell
back from 25% in 2009 to 22% in
2010 due to a decline in export val-
59
ue by 2% during 2010 . Singapore
climbed to the third rank because its
relative share rose from 7% in 2009
to 10% and export value went up by
7% . U.A.E advanced to the fourth
position although its relative share
went down from 7% 2009 to 6% in
2010. Saudi Arabia ascended to the
fifth rank , whereas its share rose
from 3% in 2009 to 4% in 2010 due
to an increase in export value by
39% during 2010. Due to an in-
crease of LNG exports , South Ko-
rea climbed to the sixth position ,
where its export value rose by
702% in 2010 and its share went up
from 0.5% in 2009 to 4% in 2010 .
Thailand retracted from the third to
the seventh position , whereas its
relative share went down from 18%
during 2009 to 4% during 2010, as
a result of a fall in export value by
78% in 2010. Malaysia occupied the
eighth rank, whereas its share
amounted to 2.5% during 2010.
Greece ranked ninth where its rela-
tive share amounted to 2% during
2010. U.S.A ranked tenth whereas
its relative share amounted to 2% in
2010.
Exports by Economic Blocks (1)
(YR Billions)
( % ) 2010 ( % ) 2009 Item
14.50 203.5 14.31 181.7 Arab Countries
11.47 161.0 11.77 149.5 GCC
3.03 42.6 2.54 32.2 Other Arab Countries
77.70 1,090.4 76.29 968.9 Non-Arab Asian Countries
0.42 5.9 6.85 86.9 Non-Arab African Countries
4.57 64.2 1.56 19.9 EC
0.03 0.4 0.30 3.8 Other European Countries
2.50 35.1 0.32 4.1 American Countries
0.02 .0.3 0.00 0.04 Australia and Pacific
0.00 0.0 0.00 0.0 Unspecified
0.25 3.5 0.37 4.7 Others
100 1,403.3 100 1,270.1 Total
Source: Central Statistical Organization. 1 - Including Re-exports.
Imports by Economic Blocks
(YR Billions)
(% 2010 ( % ) 2009 Item
37.22 747.9 35.15 654.4 Arab Countries
32.98 662.7 31.50 586.5 GCC
4.24 85.3 3.65 67.9 Other Arab Countries
25.57 513.8 26.30 489.7 Non-Arab Asian Coun-tries
0.71 14.2 0.72 13.4 Non-Arab African Coun-tries
16.53 332.2 12.96 241.2 EC
4.35 87.3 6.72 125.1 Other European Coun-tries
12.07 242.5 13.02 242.4 American Countries
2.15 43.2 3.68 68.3 Australia and Pacific
0.00 0.0 0.0 0.0 Unspecified
1.39 28.0 1.45 27.0 Miscellaneous
100 2,009.2 100 1,861.7 Total
Source: Central Statistical Organization.
60
2. Imports:
U.A.E maintained the first rand
among exporters to Yemen, where-
as its relative share increased from
17% in 2009 to 18% in 2010 and
import value rose by 11% during
2010. Saudi Arabia ascended from
the third to the second position ,
whereas its import value rose by
20% in 2010. Accordingly , its rela-
tive share went up from 7% in 2009
to 8% in 2010. China retreated to
the third rank ,whereas its import
value retracted by 5.5%. Conse-
quently , its relative share went
down from 8% in 2009 7% in 2010 .
Netherland climbed to the fourth
rank, where its import value went
up by 75% during 2010. Therefore
its relative share rose from 4% in
2009 to 6% in 2010.U.S.A retracted
to the fifth position ,whereas its im-
port value went down by 11% dur-
ing 2010 and its share decreased
from 6% in 2009 to 5% in 2010.
Brazil maintained the sixth rank it
occupied in 2009 , whereas its im-
port value rose by 37% during 2010
and its share increased from 3% in
2009 to 4% in 2010.
Top Ten Importers (1)
(YR Billions)
Country 2009 % 2010 %
India 255.6 20.12 475.3 33.87
China 318.5 25.08 312.7 22.28
Singapore 85.8 6.76 142.3 10.14
U.A.E 87.4 6.88 87.5 6.23
Saudi Arabia 38.5 3.03 53.5 3.81
South Korea 6.6 0.52 52.9 3.77
Thailand 231.8 18.25 50.8 3.62
Malaysia 1.0 0.08 35.2 2.51
Greece 0.0 0.00 27.4 1.95
U.S.A 1.2 0.09 25.5 1.82
Total 1,026.4 80.81 1,263.0 90.00
Other Countries 243.7 19.19 140.3 10.00
Grand Total 1,270.1 100.00 1,403.3 100.00
1 including Re-exports
Top Ten Exporters (1)
(YR Billions)
Country 2009 % 2010 %
U.A.E 321.1 17.25 357.7 17.80
Saudi Arabia 138.7 7.45 165.9 8.26
China 152.4 8.18 144.0 7.17
Netherlands 66.7 3.58 116.0 5.77
U.S.A 119.6 6.42 106.0 5.28
Brazil 60.8 3.27 83.4 4.15
Kuwait 84.3 4.53 82.3 4.10
Malaysia 39.0 2.09 67.9 3.38
Switzerland 102.3 5.50 66.6 3.31
Turkish 72.1 3.87 63.5 3.16
Total 1,157.0 62.15 1,253.3 62.38
Other Countries 704.7 37.85 755.8 37.62
Grand Total 1,861.7 100 2,009.1 100
Source: Central Statistical Organization