Saudi Arabia has provided a new economic aid package for Yemen, worth $500mn, reported the Saudi Press Agency (SPA).
This new aid package aims to bolster the government’s budget, support the Central Bank of Yemen, and enhance the stability and prosperity of the Yemeni people.
Aid Package to Yemen
The Saudi aid package includes a $300mn deposit in the Central Bank of Yemen, to improve the economic and financial situations; and $200mn to address budget deficit, out of a larger $1.2bn initiative through the Saudi Development and Reconstruction Program for Yemen.
The program focuses on enhancing food security in Yemen, supporting wages and operating expenses, and helping the government in implementing its economic reform program.
The economic support aims to establish economic, financial, and monetary stability in Yemen, boost the status of public finances, build the capacities of government institutions, and enhance governance and transparency, in addition to enabling the private sector to advance sustainable economic growth, and creating job opportunities.
Previous Saudi Packages
The Saudi deposits have played a positive role in increasing the foreign exchange reserves of the Central Bank of Yemen, reducing exchange rates, stabilizing the local currency and contributing to the growth of the GDP.
Moreover, they lowered fuel and diesel costs, reduced prices of imported food commodities, and supported the import of essential goods, such as wheat, rice, milk, cooking oil, and sugar.
Fostering Development
Furthermore, Saudi Arabia’s aid to Yemen have helped in fostering economic and social development, managing operating expenses, supporting national economy, and mitigating economic deterioration by boosting foreign exchange reserves and enhancing confidence in the Central Bank of Yemen.
These measures have also prompted economic growth and reduced inflationary pressures, in addition to bolstering the government’s ability to cover salaries and wages. This has contributed to reducing the budget deficit, improving the country’s financial stability as well as lowering reliance on borrowing to finance budget deficit.
Through the Saudi Development and Reconstruction Program for Yemen, Saudi Arabia has implemented 263 developmental projects and initiatives across Yemeni governorates, covering 8 critical sectors: education, health, water, energy, transportation, agriculture and fisheries, capacity building of the Yemeni government, and development programs.
