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Overview

Jordan has begun its recovery from the shock of COVID-19, fully reopening its economy and returning to in-person learning in September 2021 in the wake of an aggressive lockdown at the outset of the pandemic (March 2020–September 2020) and an intensive COVID-19 vaccination campaign. Jordan’s economy has weathered the crisis better than many of its peers, contracting by only 1.6% during 2020 and registering modest real GDP growth of 0.3% during Q1-2021. This is in part due to timely fiscal and monetary stimuli by the government, as well as improvement in terms of trade caused by the drop in oil prices. Unemployment is on the rise, however, reaching 25% in Q1-2021, with youth unemployment rates reaching an unprecedented 48.1% and women’s labor force participation at 14%, one of the lowest in the world. Central government debt rose to almost 106.3% of GDP during 11M-2020, almost 10 percentage points of GDP higher than at end-2019.

Sitting at the center of a volatile region, Jordan continues to play a role as an anchor for regional stability and for the global public goods it provides by hosting refugees and promoting cross-border regional cooperation and trade. It hosts an estimated 1.3 million Syrian refugees, who represent 13% of its total population of 10.2 million, and is globally one of the first countries to pioneer a development-focused refugee response model. Its response to the impact of the Syrian refugee crisis is combined with accelerating Jordan’s own progress and promoting refugee access to employment and services. Nonetheless, the COVID-19 crisis has exacerbated existing structural weaknesses in the country’s economy, brought unresolved social challenges to the fore, and put pressure on the country’s fragile macroeconomic stance. Over the past decade, Jordan’s GDP growth and its employment growth both averaged 2.4% per annum, insufficient to keep up with the country’s young workforce. Weak economic performance can be traced to the Syria crisis, which began in 2011 and which has had a negative effect on Jordan’s growth, poverty reduction, and debt accumulation. Public and private consumption have grown much faster than public and private investment, and the labor market is highly segmented. As a consequence, Jordan is on a declining investment trend and its trade balance has deteriorated.

For a rapid, resilient recovery, Jordan needs carry out the reforms that would enable an investment-driven model of growth. The World Bank Group has been a key partner in its reform agenda, based in the Five-Year Reform Matrix the government developed with the World Bank and other partners. Released in August 2021, Jordan’s Economic Priorities Program (EPP) for 2021–2023 prioritizes investment and business environment reforms and promotes programs and financing in the sectors needed most for investment and job creation. Jordan can seize the opportunity of recovery efforts and use the EPP to tackle structural challenges in the economy and conclude the implementation of these reforms.

Last Updated: Nov 01, 2021

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

*Amounts include IBRD and IDA commitments
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Nabeel Darweesh
+ 962 798 277 215