The International Monetary Fund hopes to reach a loan deal with Yemen by the end of the year as the impoverished Gulf state urgently needs budgetary support.

This is coming from a senior official at the Washington-based lender who made the declaration on Tuesday.

A Yemen Central Bank official has said the loan could be worth up to $500 million while IMF said it would be for 2-3 years but has not put a figure on it, adding that it is waiting for the Yemen authorities to decide how fast they want to proceed with planned economic reforms.

The IMF’s Director for the Middle East and North Africa, Masood Ahmed disclosed that they have some international discussion on exactly what pace they want to move on some elements of their reform agenda, stressing that they will be able to take it to the next step and hope to finalize the discussion as soon as they have reached an understanding.

Moreover, economic recovery in the second-poorest Arab state after Mauritania has accelerated this year and the IMF forecasts annual growth will accelerate to 6.0 percent from 2.4 percent in 2012, a big improvement from a 12.7 percent contraction in 2011 when unrest gripped the country.