Despite being a small open economy, the impact of global economic slowdown, trade disruptions, unprecedented decline in international tourism and disruption to domestic economic activity during 2020 led to a modest 1.6 percent contraction in Jordan, much less severe than previously anticipated.
Yet, the shock has impacted the kingdom’s other economic and social indicators significantly including, leading to widening of twin deficits, rise in the debt levels and unprecedented rise in unemployment rates, particularly among the Jordanian youth. With that said, some of these deteriorations are in line with what has been experienced by most countries in the world due to this shock.
High uncertainly around vaccine progress and uneven global recovery during 2021 can potentially lead to protracted economic recovery particularly in the contact-intensive sectors, such as services and tourism.
Moreover, existing vulnerabilities to growth (systematic decline in potential growth and declining productivity) even prior to the crisis, pose a serious challenge for Jordan’s economy to bounce back from crisis and to avoid permeant scaring.
World Bank’s latest projections for 2021, projects Jordan to grow by a modest 1.4 percent. Going forward, a wide range of growth-enhancing reforms are necessary to prevent economic scarring and to pave the way for a strong growth recovery and sustainable job creation.
- Jordan Economic Monitor, Spring 2021: Uncertain and Long Trail Ahead (Full Report in a PDF format)