Skip to Main Navigation

Overview

  • Jordan’s economy has been hit hard by the COVID-19 pandemic amid already low growth, high unemployment and growing debt. The World Bank estimated the Jordanian economy to have contracted by 1.6% in 2020, with unemployment rising to 24.7% in the fourth quarter of 2020 and youth unemployment rates reaching an unprecedented 50%. The economic shock of COVID-19 has exacerbated both existing structural weaknesses in the economy and unresolved social challenges, putting pressure on country’s fragile macroeconomic stance. 

    The Government of Jordan (GoJ) has enacted a series of plans and programs to address the health and socioeconomic impacts of the pandemic. The GoJ launched two social protection programs in 2020 and 2021 to support vulnerable households and workers, as well as implementing measures designed to support businesses, including delayed tax payments, partial payments of salaries, and special loan programs for small- and medium-sized enterprises. Jordan launched its COVID-19 vaccination program in January 2021, which includes equitable access for anyone residing in Jordan (including refugees) to vaccines.

    The speed of Jordan’s economic recovery in the medium-term largely depends on the evolution of the pandemic and whether reforms are put into effect. Jordan has made progress on foundational reforms that aim to improve the environment for public and private investment and contribute to job creation and economic growth. These reforms are anchored in the Five-Year Reform Matrix, which has now been incorporated as a reform pillar in the Government of Jordan’s new Government Indicative Executive Program (GIEP) 2021–2024. The Reform Matrix was developed in collaboration with the World Bank and other development partners. Moving forward, a results-based focus on unlocking priority areas of reform is needed to address structural challenges in the economy, the question of open markets, and spur investment as an engine of recovery, growth, and job creation.

    Economic performance

    The COVID-19 pandemic has had significant economic repercussions in Jordan, given the country’s small and open economy with its high rate of connections to the rest of the world. The pandemic has had particularly profound effects on the service sector, travel receipts, and tourism—all key sectors of growth for the Jordanian economy. Jordan’s unemployment rate, which marginally increased from 18.3% to 19% between 2017 and 2019, rose sharply as a result of the economic shock from the pandemic, reaching 24.7% in Q4-2020. Female unemployment, which had been declining between 2017 and 2019, from 31.2% to 27%, rose sharply to 32.8% in Q4-2020. Moreover, youth unemployment (15–24 years) jumped significantly—from 40.6% in 2019 to an unprecedented high of 50% by the end of Q4-2020.

    Jordan had made notable improvements in narrowing its current account deficit in the  two years prior to the pandemic but the global economic slowdown due to the  pandemic appears to have reversed this trend. The deficit (including grants) had decreased from 10.6% of GDP in 2017 to 7% of GDP in 2018, and to 2.1% of GDP in 2019; however, in 2020, it expanded  to 8% of GDP in 2020 because of an unprecedented (76%) decline in travel receipts along with a 9% decline in remittances, despite significant contraction in the trade balance.

    Last Updated: Jun 14, 2021

  • The World Bank’s Board of Directors approved the Country Partnership Framework (CPF) for Jordan in 2016 to cover the period FY2017–2022. The CPF lays out an ambitious agenda for growth, jobs, and greater inclusion while helping Jordan address the impact of the Syrian refugee crisis in various ways, including through the use of innovative financing tools. A Performance and Learning Review (PLR), approved by the World Bank in May 2021, takes stock of the implementation of the CPF and adjusts the CPF program to respond to Government’s emerging priorities. The PLR introduces a third pillar to the CPF: “COVID-19 pandemic: supporting an effective response and resilient recovery.” The PLR also extends the CPF period by an additional year (through fiscal year 2023) to support Jordanians through the COVID-19 crisis and to promote the implementation of key reforms for investment-led growth and job creation.

    The World Bank Group has used concessional resources to support Jordan’s Syrian Crisis Response through an exceptional International Development Association allocation of US$200 million and the establishment of the Global Concessional Financing Facility. This facility has helped fund a number of the projects set up in Jordan since.

    At the onset of the COVID-19 pandemic, the Bank mobilized swiftly to help Jordan respond to its health, economic, and social impacts by tapping its large, existing portfolio and preparing several new projects. Its focus is on: (i) Relief: helping with the health response and protecting vulnerable households through social protection and health projects; (ii) Recovery: supporting businesses and Small and Medium Enterprises; and (iii) Resilience: helping prioritize interventions/reforms for a rebound of the private sector, as well as growth, jobs, and climate-resilient recovery. 

    As of June 2021, the World Bank’s active portfolio in Jordan comprised 12 projects valued at about US$2.7 billion in low interest loans, concessional financing, and grants. The projects span key sectors: 

    • A US$400 million Program-for-Results operation promotes Economic Opportunities for Jordanians and Syrian Refugees.
    • A series of Development Policy Financing (DPF) loans—beginning with a US$500 million First Equitable Growth and Jobs DPF and the Jordan Second Equitable Growth and Jobs DPF (US$953 million)—were approved to advance Jordan’s reform agenda in line with the 5YRM to boost inclusive growth and job creation. 
    • A US$250 million Emergency Health Project supports Jordan in providing primary and secondary health services to poor, uninsured Jordanians, and to Syrian refugees. 
    • A US$300 million Jordan Education Reform Support Program expands access to early childhood education and improved conditions for Jordanian children and Syrian refugee children. 
    • A US$50 million Innovative Startups Fund Project increases private early stage equity finance for innovative small and medium enterprises.
    • A US$200 million Youth, Technology, and Jobs Project was approved to improve digitally enabled income opportunities for youth and expand digitized government services in Jordan. 
    • A COVID-19 Emergency Response Project for US$20 million to help prevent, detect, and respond to the threat posed by COVID-19, and to strengthen the national health system for public health preparedness. An additional financing for US$50 million is under preparation to support COVID-19 vaccine purchase and deployment.
    • A Jordan Emergency Cash Transfer COVID-19 Response Project for US$350 million to provide cash support to poor and vulnerable households affected by the COVID-19 pandemic in Jordan. Additional financing of US$265 million is being prepared to support an expansion of support to vulnerable households and workers.

    Jordan also has at its disposal a Multi-Donor Trust Fund (MDTF), the Jordan Inclusive Growth and Economic Opportunities Multi-Donor Trust Fund, with contributions of US$52.4 million pledged by the UK FCDO, Canada, and Netherlands. The MDTF funds 18 recipient-executed and Bank-executed grants focused on advancing Jordan’s reform agenda. 

    International Finance Corporation (IFC)

    Jordan represents IFC’s second-largest investment portfolio in the MENA Region, with outstanding commitments of US$881 million as of December 31, 2020. The portfolio is made up of loans (77%), equity (8%), risk management products (11%), and guarantees (4%). IFC’s strategy focuses on increasing private sector participation to support job creation and growth through direct investment and supporting PPPs and key business climate reforms—both in line with joint World Bank and IFC support to the Five-Year Reform Matrix. This has included Technical Assistance to the Government of Jordan in implementing the first phase of its Investor Journey Program to help improve the business environment and reduce business costs.

    IFC is also acting as a transaction adviser for the government in three Private-Public Partnerships: (i) the development of a new border crossing terminal next to the existing King Hussein Bridge; (ii) structuring a PPP transaction for the construction, operation, maintenance, and eventual transfer of 15 new schools to provide better educational facilities to Jordanian and Syrian refugee students; (iii) the expansion, operation, maintenance, and commercialization of Jordan’s National Broadband Network, in cooperation with the Bank’s digital team.

    Multilateral Investment Guarantee Agency (MIGA)

    MIGA’s outstanding gross exposure in Jordan stood at US$575 million in January 2021. Jordan remains MIGA’s largest exposure in the Mashreq region, and MIGA has been very active in the country’s PPP sector, having supported projects in water, energy, and transport. Projects include gas power, wastewater treatment, Queen Alia International Airport, and bromine manufacturing. MIGA is working closely with the IFC advisory team to identify opportunities to support FDI flows into the transport sector. Other projects (supported earlier) have involved solar power, such as at the As Samra Wastewater Treatment Facility.

    Last Updated: Jun 14, 2021

    • Education Reform 

    The Education Reform Support Program builds on the Second Education Reform for Knowledge Economy Project by expanding access to early childhood education and improving student assessment, teaching, and learning conditions for Jordanian children and Syrian refugee children. Its objectives are to expand access to, and improve the quality of, early childhood education, improve teaching and learning conditions, and reform the student assessment and certification system. This will focus on strengthening the Ministry of Education’s ability to measure and monitor student learning at all grade levels and bridge the gap between learning and certification. The program also aims to strengthen the management of the education system by supporting the ministry and strengthening its capacity to manage an increasing number of schools and students (resulting from the expansion of early childhood education and enrollment of a large number of refugee children in Jordanian schools). Over 100,000 children and Syrian refugee children have been enrolled in Kindergarten 2 (KG2) under the program, with the program reaching over 140,000 Syrian refugee boys and girls in all

    • Maintaining Health Services in Jordan

    The Emergency Health Project is a results-based project that aims to maintain and deliver health care services at Ministry of Health primary and secondary health care facilities, in addition to improving the efficiency of health services through capacity building. Uninsured Jordanians and registered Syrian refugees will benefit from the health services provided in health care facilities. A total of 1.1 million people will receive essential health, nutrition, and population services through this project.

    The COVID-19 Emergency Response Project aims to prevent, detect, and respond to the COVID-19 pandemic and strengthen Jordan’s national health system for public health preparedness. The project started out by covering the cost of the mandatory quarantine in March 2020 and will finance the procurement of critical medical equipment for COVID-19 clinical care management. The project has ensured that 32 hospitals comply with COVID-19 case management and over 1,200 staff have been trained in the management of infection and prevention.

    • Jobs for Women and the Youth 

    Over 12,000 people benefited from loans through the Micro, Small and Medium Enterprise Development for Inclusive Growth Project, of which over 10,000 were women. The project also provided loans to over 8,000 youth-owned businesses and 13,000 micro-finance loans: 62% of the beneficiaries came from outside Amman, where unemployment and poverty rates are high. Women-owned enterprises comprised 85% of the beneficiaries; youth, who suffer the highest unemployment rates, made up more than 45% of the beneficiaries. 

    • Improved Municipal Service Delivery  

    The direct beneficiaries of the Municipal Services and Social Resilience Project are estimated at 2.5 million people, of which 20% are Syrian, 21% youth, and 47% female. Current investments span rehabilitated and new roads, lighting units to improve the security and safety of neighborhoods at night, and leisure spaces. 

    Last Updated: Jun 14, 2021

Api


LENDING

Jordan: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

More Photos Arrow

In Depth

Apr 02, 2021

MENA Economic Update — Living with Debt: How Institutions Can Chart a Path to ...

The substantial borrowing that MENA governments incurred to finance health and social protection measures increased government debt. Countries must continue spending on health and income transfers, which will add to ...

Mar 16, 2021

Jordan Economic Monitor, Fall 2020: Navigating through Continued Turbulence

The global economy continues to reel from the COVID-19 shock. The initial economic impact of COVID-19 on global output is projected to be far more devastating than the disruptions observed during the peak downturn of the ...

Oct 06, 2020

Poverty and Shared Prosperity 2020

The World Bank’s biennial Poverty and Shared Prosperity report finds that the rate of extreme poverty in the MENA region rose from 3.8% in 2015 to 7.2% in 2018 — the latest year for which data is available.

Jul 15, 2020

Building for Peace: Reconstruction for Security, Sustainable Peace, and ...

The World Bank and the German Development Cooperation have joined efforts to take a fresh look at reconstruction, development, and the transition to sustainable peace in the Middle East and North Africa (MENA) region and ...

Jun 23, 2020

State of the Mashreq Women

This report calls for action in the following areas: stronger economic growth, effective policy action to close legal gaps, promotion of more egalitarian attitudes, access to quality childcare, and the provision of safe ...

Additional Resources