Yemen’s government has approved the country's 2019 budget, with estimated expenses of 3.1 trillion Yemeni riyals ($5.6 billion) and revenues of 2.1 trillion riyals ($3.9 billion) resulting in a projected deficit of about 30%.
The cabinet approved the general framework of the 2019 budget during a Wednesday (February 20th) meeting in Aden chaired by Prime Minister Mouein Abdulmalik Saeed.
The budget was presented in a bill submitted by the High Committee of Budgets that took into account Yemen's economic, financial and monetary policies.
The government seeks to finance the deficit from non-inflationary sources by using domestic debt instruments, mobilising foreign funds, and putting in place expense mechanisms that are commensurate with revenue flows.
The budget bill anticipates that revenues from oil and gas exports will account for 32% of the total revenues in 2019. This includes revenues from areas that remain outside government control, estimated at 692 billion riyals ($2.7 billion).
The budget assumes a crude oil price of $50 a barrel.
Allocations for Yemen's provinces also have increased.
Projected expenses of government-controlled areas are 337 billion riyals ($1.3 billion), with those outside government control projected at 298 billion riyals (1.2 billion). Nationwide operating expenses are 1.8 trillion riyals ($7.2 billion).
'A positive step'
"This is the first time that the budget is announced with clearer details," Studies and Economic Media Centre head Mustafa Nasr told Al-Mashareq.
"This is a positive step on the government’s part," he said. "However, the government’s ability to implement it with the same announced criteria is more important than the budget approval."
Nasr noted the 2019 budget projects a substantial increase in the expenses allocated for military and public sector salaries, as compared to other items.
He also noted that oil and gas revenues now account for 32% of total revenues.
"This is an indication that the government plans to export more oil and gas, which will increase the revenues," he said. "This is the first time since the 2014 budget that the oil and gas sector revenues have seen such a high percentage."
As for state employee salaries in areas controlled by the Iran-backed Houthis (Ansarallah), Nasr noted that 394 billion riyals ($1.5 billion) were included in the budget for this purpose.
But "the government made the payment of such salaries conditional on the Houthis’ transfer of revenues to the Central Bank in Aden, or the provision of international support in this regard", he said.
The budget bill projects an increase in foreign assistance and grants to more than 300 billion riyals ($1.2 billion), he said.
"These are high levels, and we hope they will actually be realised."