Saudi Arabia announced on December 27 a $500mn economic aid package for Yemen’s official government, including a $300mn deposit to Yemen's central bank and $200mn to help address the country's $1.2bn budget deficit.

Saudi officials said that the aid, to be distributed through the Saudi Development and Reconstruction Program for Yemen (SDRPY), aims to bolster financial stability and support essential services in the war-torn country.

The package prioritises food security, salary support and operational expenses while promoting governance reforms in Yemen's public institutions.

The central bank deposit is specifically designed to strengthen foreign reserves and stabilise the local currency.

The package prioritises food security, salary support and operational expenses, while promoting governance reforms in Yemen's public institutions. The central bank deposit is specifically designed to strengthen foreign reserves and stabilise the local currency.

Saudi Arabia's earlier economic interventions have helped reduce prices of basic goods including wheat, rice and cooking oil, while supporting 80 power plants across Yemen with oil derivatives, according to SDRPY data.

The development programme has implemented 263 projects across various sectors including healthcare, education, water, energy, and agriculture.

Recent initiatives have covered medication for chronic illnesses and cancer treatments, alongside infrastructure rehabilitation.

Yemen has struggled with economic instability amid a devastating civil war that began in 2014. The Saudi aid package comes as international organisations continue to warn of a humanitarian crisis in the country, where millions face food insecurity.

The announcement follows several diplomatic initiatives aimed at ending the conflict, though significant challenges remain in achieving lasting peace and economic recovery.