The Yemeni government is struggling to keep the economic situation stable at a time when all indicators show there is no real growth.
The inflation rate is still around 24 percent while the government seems unable to narrow this rate to nine percent. The poverty and unemployment rates remain above 50 percent and there are fears they could increase further especially after Saudi Arabia deported thousands of Yemeni workers.
The budget for the fiscal year 2014, 14 billion U.S. dollars, was passed with an expected deficit of around three billion dollars.
Officials and experts said that economic growth indicators are almost "zero."
The deterioration of the oil sector last year adds to economic concerns since the oil revenues contribute around 75 percent to the budget.
"We are just struggling to keep the situation stable in an effort to prevent any collapse. There is no talk about real growth, " said Iqbal Yasin, the first deputy trade and industry minister.
Marzouk Mohsen, head of the economic and social development research center, said the persistent deficit indicates that the national economy will continue to face big challenges.
Yemen largely depends on oil revenues but the oil industry has further deteriorated in 2013 for reasons first and foremost the security situation.
The latest crude production report released on Wednesday revealed the crude output has dropped to 158,000 barrel per day from 270,000 b/d in 2011. Blocks which have used to produce 60,000 b/d or more than 42,000 b/d including Total's block 10 and Safer block 18 are now producing between 35,000 b/d and 38,000 b/d, according to the latest output report.
An official at the petroleum exploration and production authority said on Thursday the decline in the oil output is directly reflected on the revenues which last year were less than the funds spent on fuel imports.
The official said the deterioration of this sector is first blamed on security problems including repeated attacks on oil facilities, blocking roads where oil trucks pass and annoying foreign staffs at oil blocks which in most cases lead to suspending production at key oil fields.
"No new oil fields at exploration blocks have started to produce crude since 2007; security concerns by companies are to blame," said the official, who asked not to be named.
Other challenges facing this sector include the nature and age of producing blocks, high water rates at wells and the absence of development of wells, the official said.
Mustafa Nasr, head of the economic studies and media, said the current government is unable to address economic challenges because it does not have suitable policies.
"Though oil revenues have been declining in recent years, we still see the revenues of non-oil sectors low," he said.
Mohsen said Yemen's economic exposure is very high at around 50 percent and this means "our economy is facing the possibility of collapse