publication April 16, 2018

Jordan's Economic Outlook - April 2018

Jordan’s economy remains in a low-growth scenario with GDP expected to increase by 2.4% in 2018 and 2.5% in 2019 from 2.1% in 2017. Improvements in tourism and mining and quarrying are expected to have driven a timid improvement in growth in 2017; however, the economy remains burdened with ongoing uncertainty in Syria, slow revival of economic cooperation with Iraq, and an economic slowdown in the Gulf Cooperation Council (GCC). In addition, the economy is subject to a slow pace of structural reforms that is impeding a strong recovery in growth.

Jordan’s labor market continues to face significant vulnerabilities. The unemployment rate remained elevated at 18.5% in the fourth quarter of 2017 (Q4-2017), while unchanged compared to Q3-2017, it is a deterioration from Q1 and Q2 levels (which stood at 18.2 and 18.0%, respectively). Unemployment rate in 2017 stood at 18.3% for the year.

Meanwhile, the labor force participation rate averaged 38.1% in Q4-2017, declining from 39.2% in Q3-2017. On an annual basis labor force participation rate averaged 39.2%, exposing significant marginalization of females, youth and bachelor degree holders.

Poverty is likely to have risen in Jordan given rising inflation, unemployment and sluggish growth. Jordan has not released poverty estimates since 2010 due to issues with data quality for the 2013-14 Household Expenditure and Income Survey (HEIS). The 2017-18 HEIS, which will be representative of Jordanian, Non-Jordanian and Syrian Nationals was initiated in August 2017.