DUBAI: Yemen’s income from oil exports tumbled by over 64 percent to $73.4 million in May from a year ago, due to attacks on an export pipeline, and the central bank’s foreign asset reserves shrank to their lowest since end-2011, data showed.
Sanaa’s finances have deteriorated as it has been caught in a nationwide fight against militants and other rebel groups. It has suffered power cuts and petrol shortages with the government struggling to pay public sector salaries and finance food and energy imports.
It relies on crude oil exports to finance up to 70 percent of its budget.
Sanaa has earned just $671 million from exporting its crude in January-May, nearly 40 percent less than in the same period last year, the central bank’s monthly report showed.
As a result, the central bank’s gross foreign asset reserves slipped for a sixth month in a row to $4.6 billion in May from $4.7 billion in April, reflecting the state’s failure to secure oil pipelines against bombings.
That level is enough to secure 4.4 months of imports but bellow 7.6 months on average Yemen recorded in 2007-2013.
When deducting liabilities, which include Saudi Arabia’s $1 billion deposit from 2012, the central bank’s reserve cushion is much lower, at $3.3 billion in May. Overall, Yemen’s banking system held $5.6 billion in net foreign assets in May.
Financial aid from abroad, which has been slow to arrive, has become a lifeline for Yemen.
Sanaa is hoping to seal a long-discussed $550 million loan from the International Monetary Fund this year that could help unlock more donor funds.
The IMF expected in April Yemen’s budget deficit to shrink to 6.7 percent of gross domestic product this year from 7.1 percent in 2013, which was the biggest shortfall since 2009.
Inflation eased to an annual 7.4 percent in April from this year’s peak of 7.6 percent in the previous month, as growth in prices of food and non-alcoholic beverages cooled slightly, the central bank’s report also showed.
Core inflation, which excludes volatile prices of food, tobacco and qat leaf, remained at 10.7 percent in April for the second month in a row, the highest level since August 2012. That seems to rule out further monetary policy easing for now.
The central bank slashed its key rate by 5 percentage points from October 2012 to February 2013 to support economic recovery, bringing it to a three-year low of 15 percent. Headline inflation averaged 7.1 percent during this period and core inflation 7.3 percent.
Yemen oil export income tumbles 64% in May, reserves sink
Yemen oil export income tumbles 64% in May, reserves sink
Free trade negotiations between GCC, India mark new phase of partnership, says sec-gen
RIYADH: The Gulf Cooperation Council’s secretary-general affirmed that the negotiations for a free trade agreement between the GCC and India, and the signing of the joint statement, represents a new phase of strategic partnership.
Jasem Mohamed Al-Budaiwi said that this contributes to enhancing close cooperation and strengthening economic and trade ties, according to the Saudi Press Agency.
This came during the signing ceremony of the joint statement on launching the free trade agreement negotiations between the Al-Budaiwi and India’s Minister of Commerce and Industry, Piyush Goyal, which took place in New Delhi, on Tuesday.
During the signing ceremony, Al-Budaiwi said that the Terms of Reference, signed on Feb. 5, provide a comprehensive and clear framework for these negotiations. The two nations agreed to discuss enhancing cooperation in vital strategic areas, including trade in goods, customs procedures, and services.
Additionally, the framework covers Sanitary and Phytosanitary measures, intellectual property rights, cooperation on Micro, Small, and Medium Enterprises, along with other topics of mutual interest. This reflects the comprehensive nature of the agreement and its ability to keep pace with the future economy.
Al-Budaiwi expressed hope that these negotiations would lead to a comprehensive and ambitious free trade agreement that works to remove customs and non-customs barriers, enhance the flow of quality investments in both directions, and achieve further liberalization in trade and investment cooperation between the GCC and India for mutual benefit.
This would provide a stimulating economic environment and an investment climate that opens broad horizons for the business sector, supports supply chains, and accelerates the pace of economic growth in line with the ambitious developmental visions of the GCC states.
The top official affirmed the full readiness of the General Secretariat to host the first round of negotiations at its headquarters in Riyadh during the second half of this year.
The two sides held a meeting during which they reviewed the existing cooperation relations between the GCC and India and discussed ways to develop and elevate them to broader horizons, serving mutual interests and enhancing opportunities for strategic partnership between the two sides, particularly in the economic, investment, and trade fields.
They praised the role undertaken by the negotiating teams from both sides, appreciating the efforts contributing to reaching a comprehensive agreement that enhances economic integration and supports the smooth flow of trade between the two nations.
