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A new era of growth in 2024

Dec 31,2023 - Last updated at Dec 31,2023

As we bid farewell to a challenging and exhausting year, the Jordanian economy is gearing up for a new year, carrying unique economic challenges and opportunities that demand strategic planning and adaptability. A comprehensive analysis of the Jordanian economic landscape reveals a delicate balance between strengths and weaknesses, the impact of external shocks and internal dynamics, requiring careful attention to achieve sustainable growth.

Jordan faced the challenge of continuous growth long before the onset of the COVID-19 pandemic, and the economic shocks resulting from the pandemic and subsequent global and regional shocks have affected existing macroeconomic risks, urging a critical reevaluation of growth strategies adopted over the past decade and a half in Jordan. External shocks and their responses have reshaped the relative advantages of the production structure in the Jordanian economy. However, amid these challenges, there are clear and significant opportunities that, if strategically leveraged, can lead the economy into a new era of sustainable growth in 2024.

While growth and reform strategies in Jordan have been comprehensive and ambitious, the primary focus has been on reforms rather than fostering strong economic growth. Urgent transformation is needed in the growth strategy to achieve significant leaps in economic growth rates, inaugurating a new era of economic prosperity for Jordan through the following key points:

First, fundamental transformation in coordinating mechanisms between the public and private sectors and their related initiatives. Partnership projects must play a significant role in the new growth strategy, especially considering the positive and sustainable impact previous partnership projects have had on the economic structure.

Second, investment in research and development to enhance competitiveness in the Jordanian economy, encouraging entrepreneurship and supporting technological startups to promote innovation and technology integration across various sectors. Leveraging digital technology for remote work can boost productivity, opening new avenues for specialised employment and positioning Jordan as a hub for knowledge-based industries.

Third, expansion of export markets for goods and services, recognising the vital role that export-oriented activities can play in expanding Jordan’s presence in global markets. This involves diversifying key export sectors, expanding export markets and enhancing competition for export products.

Fourth, exploring the potential of green growth, as it represents a promising path for the transformation of the Jordanian economy. By investing in sustainable practices, renewable energy and environmentally friendly initiatives, Jordan can contribute not only to environmental preservation but also benefit from the growing global demand for green technologies and products.

Fifth, continued development and improvement of logistical and transportation infrastructure to enhance trade, attract investment, and stimulate economic zones’ development.

Sixth, maximising the potential and capabilities of the robust banking sector, a key pillar for supporting economic stability. Utilizing the sector’s strength to facilitate access to credit for individuals and companies can further stimulate economic growth. Collaborative efforts between the government, central bank and banks can lead to innovative financial solutions to address specific challenges. Additionally, cooperative efforts between the government, central bank, and commercial banks can lead to innovative financial solutions to address specific challenges. It is essential to emphasize the need to increase credit facility growth rates to levels not less than 20 per cent, aiming to achieve economic growth rates higher than 5 per cent, especially considering that the majority of liquidity in the economy originates from the banking sector. This requires presenting viable economic projects to banks for financing from the available liquidity they possess.

Seventh, in response to the deep economic impacts of global economic repercussions, shocks and geopolitical tensions on the Jordanian economy, increasing economic resilience is crucial. This involves diversifying and complicating the economy, adopting risk-based policies and strategies, and establishing diplomatic and trade relationships with a diverse range of countries to mitigate the impact of external shocks.

Eighth, addressing the persistent challenge of high and entrenched unemployment requires a multifaceted strategy. Improving employment opportunities can be achieved through investments in education and vocational training aligned with labor market needs. Simultaneously, supporting small and medium-sized enterprises, promoting entrepreneurial spirit, providing financing, enhancing infrastructure and directing investment towards promising sectors that require a workforce are essential.

Ninth, another factor affecting the Jordanian economic landscape is the significant increase in public debt, reaching approximately 115 per cent of the gross domestic product by the end of 2023. A large portion of this debt is attributed to the energy and water sectors. This poses a significant financial challenge for the government, necessitating careful debt management strategies and a focus on enhancing financial sustainability.

In conclusion, Jordan must take decisive steps to implement these strategies, making 2024 an effective beginning for a new era of economic growth and prosperity. Wishing everyone a prosperous year ahead.

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