Amman: Jordan has shown resilience amid successive external shocks, while maintaining macroeconomic stability with vulnerabilities associated with climate change and regional conflicts, according to the World Bank ()’s latest report.
In a report on the global economic outlook, the WB stressed the importance of addressing the structure of labor market challenges, stimulating the business environment and continuous focus on implementing reform to achieve a sustainable economy, and raising the growth rate by increasing productivity, pursuing investment, and export-led growth.
The report pointed out that despite the challenges and the regional and global sequence of external shocks, growth over the past decade averaged about 2.2 percent annually, which came with the support of public finance, prudent monetary policy, and macroeconomic stability, while the Kingdom also made progress in domestic revenue mobilization.
The report highlighted that the recent conflict in the Middle East, which initially erupted on O
ctober 7, has affected the tourism, trade and investment sector across the region, noting that there is a longer and wider risk that the conflict may exacerbate existing challenges such as trade disruptions and high freight costs.
Jordan is one of the most water-scarce countries in the world, and its vulnerability to extreme weather, including high temperatures and low rainfall rates, exacerbates the risk of water scarcity and food security.
The WB said in its report that the Kingdom’s growth rate may decline to 2.5 percent in 2024 due to the consequences of the Israeli aggression on the Gaza Strip, but it will rise again to 2.6 percent in 2025 and 2026, which confirms the ability of the national economy to absorb shocks, exceptional circumstances, and external economic fluctuations.
On recent developments in macroeconomic indicators, the report showed that the remarkable performance in the manufacturing and agriculture sectors, along with the continued strong contribution of the services sector, led to a
slight increase in growth to 2.7 percent (year-on-year) in the third quarter of 2023, and showed that manufacturing and agriculture recorded their highest average growth rates since the first nine months of 2011 and the first nine months of 2010, respectively, and the restaurants and hotels sector witnessed its highest average growth rate since 9 months in 2012, despite the initial setback in tourist arrivals due to the outbreak of the conflict in the Gaza Strip.
With regard to labor markets, the report showed that they improved slightly, and labor force participation improved to 34.1 percent in the fourth quarter of 2023, mainly driven by higher female participation, which recorded the highest level since the first quarter of 2019 at 15.1 percent in the fourth quarter of 2023, and unemployment decreased to 21.4 percent in the fourth quarter of 2023, but it remained the same above the pre-Covid average.
In its report, the WB predicted that the relative stability of imported commodity prices and weak core in
flation will keep inflation under control, despite some temporary effects from higher freight costs due to the Red Sea disruptions.
Source: Jordan News Agency