The World Bank got it wrong

The World Bank continues to practise its hobby of issuing economic projections that never happen, not even by accident.

The latest projection by the World Bank was that the rate of economic growth in Jordan would be 2.3 per cent in 2016 and 2.6 per cent in 2017.

Both rates are way below the previous projections, but still higher than realistic.

The World Bank deserves our thanks and appreciation for its optimism concerning Jordan’s present and future economic growth.  However, it has to observe maths in order for its optimism to be realistic and dependable.

The World Bank knows well that the economic growth rate in Jordan was 2.3 per cent in the first quarter of 2016, 1.9 per cent in the second quarter, and 1.8 per cent in the third quarter. 

If the overall growth rate for the entire 2016 is to reach 2.3 per cent, as the World Bank thinks, the growth rate in the fourth and last quarter must have be at least 3.2 per cent, which is an impossible assumption.

I wonder why the World Bank and other observers think that economic growth rate in Jordan for 2016 could be more than 2 per cent.  What benefit can Jordan get from such high predictions that do not materialise?

When making predictions, one makes rough estimates that may turn out close or far from the mark, but when estimates are related to a past year, experts are not allowed to go beyond facts and figures that are already established.

The World Bank offered its projection that the economic growth rate in Jordan during 2017 will be 2.6 per cent. 

Let us hope that this is true, because it means that the trend of growth is finally going up after six years of economic slowdown and negative indicators.

In this case, it would have been useful if the World Bank had tried to substantiate its projection and tell us what assumptions it made to reach this conclusion.

Did the bank assume that the closed borders will open up in 2017, that the risk of terrorism will subside or disappear, that the Middle East will be safe and stable or that the international community will realise that Jordan deserves more assistance to cope with hosting over 1 million Syrian refugees.

Perhaps the World Bank believes that implementing the IMF programme for economic reform will spur growth despite austerity, reduction of public expenditure, reduction of deficit and less borrowing, which are the main features of the programme that in themselves do not promote growth.