Despite reforms, economic turmoil continues to limit household access to food

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Widespread Crisis (IPC Phase 3) outcomes are expected through at least May 2026, as the ongoing economic conflict between the Sana'a-based authorities (SBA) and the internationally recognized government (IRG) continues to undermine economic activity critical for local livelihoods and drive high living costs, resulting in a poor business environment, weak labor market, and constrained household purchasing power. Emergency (IPC Phase 4) outcomes are expected to persist in Al-Hudaydah, Hajjah, and Ta'izz governorates through May 2026 due to sustained impacts of missile strikes on key infrastructure (such as seaports and factories) and the SBA's inability to recover, which have worsened labor demand and reduced key income sources for households.
The November cereal harvest and ongoing citrus harvest are expected to lead to modest seasonal improvements in food and income access. However, conflict between the SBA and IRG has reduced cultivated land, as farmers cannot access lands in frontline areas or containing explosive remnants of war (ERW). Reduced area cultivated has increased competition for agricultural labor in conflict-unaffected areas within an already weak labor market. Below-average precipitation is expected through the end of 2025, limiting development of late-planted crops in the northern/central highlands and wheat and barley in eastern plateau and coastal areas. The end-of-year rainfall forecast indicates the ongoing cereal harvest will be below average.
On October 28, 2025, the Presidential Leadership Council (PLC) approved a comprehensive economic reform plan to strengthen reforms implemented by the IRG and the Central Bank of Yemen in Aden (CBY-Aden) in August. Key reforms include closing illegal seaports, addressing public revenue imbalances at the governorate level, and stopping illegal taxes on imports. The IRG has instructed illegal seaports to be closed — namely Qena in Shabwah, Al-Shihr in Hadramout, Nashtun in Al-Mahrah, and Ras Al-Ara in Lahij — to concentrate revenue from imports through Aden and Al-Mukalla. However, the IRG has made little progress returning seaport revenue to CBY-Aden due to weak institutional oversight, as high-ranking officials continue operating illegal seaports without depositing revenue into CBY-Aden. The IRG continues facing difficulty balancing its budget, paying government salaries, and maintaining basic public services such as electricity.
A key component of the PLC economic reform plan is implementing a customs dollar exchange rate adjustment (likely in 2026) to help align official and parallel market exchange rates. The customs dollar exchange rate is the rate customs authorities use to calculate duties on imports and can differ from parallel and official market exchange rates. In June 2021, the customs dollar exchange rate increased by 100 percent, followed by another 50 percent increase in January 2023. The IRG previously raised this rate to align official and parallel market exchange rates due to rapid currency depreciation and sharply declining government revenue.
Official information on the latest customs dollar exchange rate has not been released, although local economic analysts anticipate a rise of around 100 percent. In previous adjustments, basic food commodities were excluded from the new rates; however, food prices increased due to rising fuel costs and ineffective price controls. Despite assurances that basic food items would remain exempt from the current adjustment, local analysts predict that prices for non-food goods will rise by at least 6 to 7 percent. This would likely compel traders to take advantage of the situation and raise prices (which was observed in previous adjustments), particularly given the poor enforcement of price controls by IRG institutions.
On November 16, the Kingdom of Saudi Arabia (KSA) deposited the first 90 million USD (out of 368 million USD) into the IRG/CBY-Aden, as part of the monetary pledge announced in September 2025. The funds are expected to boost public finances and address the budget deficit, enabling the IRG to resume obligations suspended due to declining revenues and depleted foreign currency reserves. The primary purpose of the monetary infusions is to assist fulfilling short-term public responsibilities, such as restarting salary payments, and not addressing long-term economic problems.
The economic situation in areas under SBA control continues to deteriorate, as the private sector in Sana'a is facing significant decline, due to ongoing SBA economic campaigns targeting various businesses, including restaurants, shops, and hotels. These campaigns impose additional fees and increase regulatory restrictions on business owners. According to key informants, many small businesses, such as retail shops, have shut down due to a 100 percent customs tax on imported non-food goods. Daily wage labor and self-employment were key income sources enabling access to food using credit. However, continued income losses and declining purchasing power will likely limit households' ability to access food on credit.
Tensions between the SBA and KSA flared again in November when the SBA accused KSA of failing to uphold commitments under the peace agreement roadmap, specifically regarding reconstruction and salary payments in the first stage. This follows escalating accusations of violations of the economic truce agreement signed in June 2024. Oman is mediating to revive the peace process between the SBA and KSA. Additionally, military mobilization and reinforcements have increased along the main frontlines against the IRG, with drone attacks and skirmishes particularly observed in Ta’izz, Marib, and Al-Jawf.
In SBA-controlled areas, World Food Programme (WFP) assistance remains paused, with the last Targeted Emergency Food Assistance (TEFA) distribution in late August. In IRG-controlled areas, WFP completed the fifth TEFA cycle of 2025 in mid-October, supporting approximately 3.4 million people. The sixth cycle is in progress, aiming to assist the same number. As of October, WFP reached 487,963 beneficiaries with around 4,200 metric tons (MT) of food. In January 2026, WFP plans to restart TEFA in the IRG with likely reductions in ration sizes and beneficiaries due to funding shortages.

Recommended citation: FEWS NET. Yemen Key Message Update November 2025: Despite reforms, economic turmoil continues to limit household access to food, 2025.

This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.