World Bank predicts Kingdom’s economy to grow 2.1% in 2022

AMMAN — The World Bank on Monday predicted the Jordanian economy to grow by 2.1 per cent in 2022, the Jordan News Agency, Petra, reported.

The bank said that high commodity prices, supply chain bottlenecks and the impact of the Russian-Ukrainian war pose significant negative risks to the Kingdom’s economic outlook.

In the Jordan Economic Monitor (JEM), the bank indicated that its economic outlook depends on the relatively strong growth rate of 2.2 per cent recorded in 2021 thanks to the supportive monetary and fiscal policies that the government resorted to.

The bank added that unemployment, particularly among youth and women, remains at alarming levels, stressing that reforms are needed to stimulate investment to create more job opportunities.

A number of sub-sectors, especially the services sector, which relies on direct interaction with the public such as restaurants and hotels, are still lagging behind pre-pandemic levels, the bank highlighted.

According to the report, Jordan’s recent economic recovery did not lead to a remarkable rise in creating job opportunities.

Although the recovery of service sectors helped ease labour market pressures, the overall unemployment rate in Jordan reached about 23 per cent at the end of 2021, compared with the pre-pandemic level of 19 per cent at the end of 2019.

The report concluded that the high levels of unemployment in Jordan are mainly due to the limited ability of the private sector to create more and better jobs, as small, low-productivity firms dominate the economy.

Regional Director of the Mashreq Department at the World Bank, Saroj Kumar Jha stressed that despite the economic recovery that Jordan has witnessed, the urgent social and economic challenges are still entrenched. 

Expediting the implementation of investment-supportive reforms will be critical to creating a momentum economy and reviving the private sector as a key  job creator in the country, he added.

The JEM offered four recommendations to encourage investment and enhance the country’s ability to better manage times of uncertainty, including increasing microeconomic reforms to encourage private sector development and implementing reforms aimed at addressing unemployment, especially among youth and women.

The report also proposed shifting to a post-crisis macroeconomic policy framework to ensure adequate and reassuring signals are given to investors regarding the investment environment and renewing Jordan’s debt financing strategy.

The report allocated a chapter titled "Creating More and Better Jobs in Jordan" in which it reviewed the main structural challenges in the Jordanian labour market as well as the reforms required to overcome them.

The report showed that the coronavirus pandemic has reduced job opportunities available to young people, who constitute about one fifth of the total working-age population in Jordan.

As of the end of 2021, official statistics indicated that more than half of the country's youth were unemployed, with a higher percentage among young female workers.