As fighting intensifies across Yemen between the government and the Houthis, millions of people are confronting deteriorating living and economic conditions. Salaries for large segments of the workforce are either unpaid or irregularly disbursed, while prices for goods and services continue to rise. This economic struggle is compounded by a divided banking system that complicates money transfers across the country.
In Aden, the internationally recognized Yemeni government’s interim capital, the issue is not a shortage of goods but the inability of people to afford them. Salaries have not kept pace with rising costs of food, rent, healthcare, and transport, leaving workers with little disposable income. Bushra Abdullah Abdulwarith, a government employee in Aden, earns 78,000 Yemeni riyals ($50) a month, while typical household food costs in government-held areas are about 130,366 riyals ($83), according to estimates by the Yemen Economic Tracking Initiative.
The economic difficulties illustrate how over a decade of war has devastated Yemen's economy. The World Bank reports that real GDP per capita has fallen by approximately 58 percent since 2015. The fragmentation of Yemen’s monetary institutions and the disruption of oil exports have contributed to this decline.
Bushra noted that rising prices have forced many households to eliminate non-essential purchases and cut back on expensive basics, particularly meat. Some families have resorted to buying food in smaller quantities or on credit. Ayman al-Maqtari, who works at a shopping center in Aden, observed that customers now rarely buy non-essential items and often choose smaller quantities of essentials.
The decline in purchasing power has also affected commercial activity. Retailers have begun advertising discounts to attract customers amid weak demand for non-essential items. The Yemeni government approved a 20 percent cost-of-living allowance for public-sector employees in May, but this increase is based on base salaries, resulting in a relatively small benefit for many workers.
In early October, the World Food Programme reported that 74 percent of households in accessible government-controlled areas were unable to meet their basic food needs. The crisis is particularly evident in Marib, where a sharp increase in the population has strained housing and public services. Government employees in Marib often see their salaries disappear within days, and displaced families struggle to afford basic necessities.
Salah al-Zuhaifi, a government worker in Marib, stated that inflation has eroded his salary's purchasing power. Abu Mohammed Nasser al-Asbahi, another government employee, mentioned that more than half of his salary goes toward rent, leaving little for other expenses. The healthcare sector has also been impacted, with rising medicine prices forcing patients to decline parts of their treatment.
Residents in Houthi-controlled areas are experiencing a similar economic crisis, with many public-sector employees going years without regular salaries. The Houthis have imposed strict monetary controls, affecting the circulation of currency and leading to cash shortages. Despite a relatively stable exchange rate in Houthi-controlled Sanaa, many families struggle to afford basic necessities, often relying on borrowing or support from relatives.