The Yemeni government's general budget recorded a significant deficit of approximately 50% in the past year, 2025, according to a recent report from the Central Bank of Yemen in Aden. This substantial shortfall is primarily attributed to a sharp decline in foreign grants, particularly from Saudi Arabia.
The Central Bank's annual report indicated a notable deterioration in the state's fiscal position during 2025. The decrease in foreign aid directly impacted public revenues, leading to an expansion of the fiscal deficit despite a relative reduction in public expenditures. Consequently, the budget registered a cash deficit of 1,338 billion Yemeni rials in 2025, a stark increase from the 804 billion rials deficit recorded in 2024.
In 2025, public revenues totaled 1,435 billion rials against expenditures of 2,773 billion rials, resulting in a 48.2% deficit. This contrasts with 2024, when revenues stood at 2,065 billion rials, with expenditures at 2,870 billion rials, yielding a 28% deficit. The report attributes the swollen deficit to a considerable drop in grants from the Kingdom of Saudi Arabia, which decreased by 870.8 billion rials, or approximately 70%, compared to 2024.
Despite these challenges, the report highlights some positive developments, including an improvement in the government's collection of non-oil revenues. These non-oil revenues have become the sole source of income alongside grants, especially after the halt in oil exports late in 2025. The report shows an increase in non-oil revenues, encompassing taxes and customs duties, as well as non-tax revenues like various fees and domestic gas sales, reaching 1,047 billion rials in 2025, up from 807 billion rials in 2024. This performance offers a measure of optimism regarding the economic and fiscal reforms initiated by the government mid-last year.
While the report notes a slight decrease in overall public expenditures by 96 billion rials in 2025 compared to the previous year, detailed figures suggest the government continues to struggle with rationalizing its spending. The most significant reduction in expenditures was observed in salaries and wages, which fell to approximately 713 billion rials from 998 billion rials in 2024. This decline is attributed to the government's inability to disburse salaries for civil and military sectors for several months in 2025. A similar reduction was seen in social subsidies and benefits, including provisions for subsistence, which decreased from 776 billion rials in 2024 to about 600 billion rials in 2025.
Conversely, expenditures on the procurement of goods and services and interest payments saw notable increases. Procurement costs rose from 298 billion rials to 428 billion rials, while interest payments escalated from 559 billion rials to 795 billion rials during the past year.
