EBRD forecasts growth by 1.5% for Jordanian economy

AMMAN — The European Bank for Reconstruction and Development (EBRD) on Tuesday said that the Jordanian economy in 2020 contracted for the first time in 30 years due to the COVID-19 pandemic, but the recession was modest when compared with regional counterparts.

The authorities estimate that the economy shrank by 1.6 per cent, despite stricter lockdown enforcement than in comparable countries that suffered significantly stronger economic contractions, according to the EBRD’s Regional Economic Prospects report seen by The Jordan Times.

The sectors of finance (insurance, real estate and business services) and agriculture were the principal sources of growth, but tourism, which had been the main driver of growth in recent years, declined by 76 per cent in 2020.

GDP growth is forecast to rebound to just 1.5 per cent in 2021, with the economy held back by the lingering effects of the COVID-19 pandemic, a sluggish recovery of tourism, and fiscal tightening to rein in the growing public debt, the report said.

In 2022, growth is expected to pick up to 2.2 per cent, as the Kingdom advances reforms and global tourism resumes. The main risks to the outlook include the erosion of real competitiveness stemming from an overvalued exchange rate, regional instability, and slower-than expected recovery in partner economies, according to the report.