Addressing Yemen’s Economic Crisis. Priorities for Stabilisation, Recovery, and International Engagement

Yemen’s economy remains in decline, but the government has delivered its strongest reform progress since the conflict began, advancing fiscal, financial, and institutional reforms while renewing engagement with the IMF. These gains are threatened by suspended oil exports, severe fiscal pressures, an escalating electricity crisis, and a sharp reduction in humanitarian funding. Amid renewed conflict in 2026, the government faces the dual challenge of pursuing reform while waging war. This paper examines how targeted European support could strengthen ongoing reforms and help prevent the loss of a rare window of opportunity for Yemen’s economic stabilization.