Jordan Economic Monitor - Spring 2022 : Global Turbulence Dampens Recovery and Job Creation
Jordan’s economy achieved a relatively strong rebound, registering 2.2 percent growth in 2021. The nascent recovery was led by a broad-based expansion of the services and industrial sectors, while the rebound in the travel and tourism also exceeded...
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| Format: | Report |
| Language: | English |
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Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099410007122222740/IDU05823c2b70646004a400b9fa0477cea7736a4 http://hdl.handle.net/10986/37748 |
| Summary: | Jordan’s economy achieved a
relatively strong rebound, registering 2.2 percent growth in
2021. The nascent recovery was led by a broad-based
expansion of the services and industrial sectors, while the
rebound in the travel and tourism also exceeded
expectations. This robust economic recovery was supported by
accommodative but prudent monetary and fiscal policy along
with a recovery in domestic demand and the gradual reopening
of the economy. However, the recovery of some subsectors,
particularly contact-intensive services continues to lag
behind pre-pandemic level, leading to weak recovery in jobs,
especially among the Jordanian youth. Moreover, the
underlying improvement in domestic demand amid an
unprecedented increase in the global commodity prices has
kept the current account deficit elevated for another year.
Nonetheless, Jordan ended 2021 on a strong footing as
Central Bank’s gross foreign reserves remained at a
comfortable level, on the back of strong multilateral and
bilateral support. Meanwhile, the Central Government resumed
its fiscal consolidation path, aided by strong growth in
both tax and non-tax revenues. The Jordanian economy is
expected to sustain recent momentum during 2022, aided by a
full opening of the economy and a return in tourism and
travel which is anticipated to boost Jordan’s services
sector. However, persistent global headwinds, including
rising international commodity prices, global supply chain
bottlenecks, negative spillovers from Russian invasion of
Ukraine, and Fed tapering, pose major downside risks to
Jordan’s economic outlook. Thus, a private sector driven
growth and investment reform agenda needs to be put in place
immediately which can help Jordan manage turbulence and
uncertainty better. |
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