Balance of payment sets down $3,1 million deficit in 2007

The balance of payment set down $ 3,1 million deficit in 2007 in comparison to $1,446 million surplus in 2006.

The ex-Central Bank’s assistant Deputy Minister for research and statistics and the economic expert, Hassan Qa’tabi, showed in a study that the deficit was due to the increase in international commodity prices. 

In his study Qa’tabi showed that the imports ascended in 2007 by a $ 1,5926.1 with an increase of $1,286.2 than that of 2006, at rate of about 22 percent. 

Qa’tabi said that things further worsened due to the exports drop at the same period from $ 7,316.4 to $7,131.

He added that the Yemeni export’s structure shows that the oil exports constitute 92 percent of the Yemeni exports in 2007, yet the drop in oil production decreased the export revenues despite the international increase in oil prices.

The study also showed that the increase in commodity prices in 2007 negatively impacted the trade balance. 

The study expects a continued international increase in commodity prices because of the great powers’ intention to produce bio fuels from cereals, pointing out that the price increase surge will continue up to 2015. 

Qa’tabi warned of the serious effects of the increase in trade balance in coming years. He said that despite the small deficit of 2007, it is expected that conditions may turn to be worse in the medium and short run.

He called all relevant bodies to join efforts to study the suitable ways of alleviating the negative economic and social price rise effects.

The study showed that the payment balance showed improvement in 2006 and 2007, making surplus at the overall balance, which Yemen could have exploited in balancing the increase of the imports, which were at controllable rates because of the relatively high oil revenues and despite production drop at that time.

The study showed that the overall payment balance made a surplus of $ 1,446 million in 2006 compared to $ 84,4 million in 2005.

This surplus was 7, 6 percent of the overall per capita, in comparison to 3, 5 percent of the same period.  Qa’tabi attributed this surplus in the payment balance to the surplus in current accounts which was $ 205,7 million in 2006, compared to  $ 633,2 in 2005 in addition to a surplus of capital accounts of  $ 1,059.7 million in 2006.

He pointed out that the surplus rate in per capita dropped from 3,8 percent to 1,1 percent at the same period. 

The study pointed out to the drop in trade balance from $ 1,700.3 million in 2005 to 1,390.3 in 2006 because of the increase in of imports at 25,7 percent  from  $4,712.9 million to 5,926.1  million.  The study recommended a number of measures including the increase of cereal cultivated areas, encouraging   farmers for cereal farming, hiring or buying lands in some Arab countries for cereal production to meet cereal price increase.

It also recommended oil discovery encouragement to increase raw oil production exports, to make use of the increasing oil prices.

It also recommended an awareness campaign to change consumer habits, by changing for instance from use of the white wheat flour to the brown one.  

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