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Jordan’s Economy Shows Signs of Recovery, But Challenges Remain

Amman, Jordan - Despite signs of recovery, Jordan’s economy still faces significant challenges.

Current Account Deficit and International Reserves

The current account deficit (CAD) in Jordan has widened to 12.1 percent of GDP as of September 2021, driven by a surge in global commodity prices and modest recovery in travel receipts compared to pre-pandemic levels. However, international reserves remain comfortable, covering 9.5 months of imports.

Employment Indicators

However, employment indicators continue to raise concerns for household welfare. The employment rate remains low at 26.4 percent, with unemployment rates still high at 23.2 percent in Q3-2021, particularly among women and young people.

Growth Prospects

Growth is expected to reach 2.0 percent and 2.1 percent in 2021 and 2022 respectively, led by a recovery in domestic demand and supportive government policies. On the supply side, acceleration in tourism and services are expected to boost the economy.

Challenges Ahead

Despite these positive trends, Jordan’s economy still faces significant challenges. The ongoing Russian invasion and associated sanctions are expected to lead to a high CAD in 2022 due to higher energy prices and reduced exports.

World Bank Forecast

The World Bank has revised its growth forecast for Jordan, with real GDP growth expected to slow down from 2.3 percent in 2021 to 1.6 percent in 2022. Inflation is also expected to rise to 3.3 percent in 2022.

Key Indicators

  • Real GDP growth: 2.0 percent (2021), 2.1 percent (2022)
  • Private Consumption: -0.5 percent (2019), 4.5 percent (2021)
  • Government Consumption: 2.1 percent (2019), 3.9 percent (2021)
  • Exports, Goods and Services: 6.5 percent (2019), 20.7 percent (2021)
  • Imports, Goods and Services: -3.1 percent (2019), 19.5 percent (2021)

Poverty Outlook

The World Bank expects poverty rates to remain high in Jordan, with the poverty headcount ratio at $5.50 per day expected to decline gradually from 14.4 percent in 2021 to 12.3 percent in 2024.

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“Addressing poverty requires a sustained and inclusive growth strategy that prioritizes education, healthcare, and social protection,” said another World Bank spokesperson. “The government needs to invest in these areas to ensure that the benefits of growth are shared by all.”