2.2% higher GDP in 2021 than 2020: ‘Normal, but not good enough’

1. Zarqa free zone
An undated photo of the Zarqa free zone. (File photo: Jordan News)
AMMAN — According to the quarterly report released Sunday by the Department of Statistics, the GDP grew by 2.2 percent in 2021, and GDP, at constant market prices, climbed by 2.6 percent in the fourth quarter of last year, compared to the fourth quarter of 2020.اضافة اعلان

While this growth is considered normal by analysts, the economic growth for this year remains a concern.

"This economic growth number was expected, but it is not good enough,"  economic expert Mazen Irsheid told Jordan News, explaining that in 2021 “life resumed its normal flow, and economic sectors reopened, albeit late, at the beginning of September”.

Irsheid said that the growth of the GDP in Jordan is normal, “but when compared to the years before the epidemic, i.e., 2019, the percentage appears low, implying that the economy and the GDP are not yet back to where they were before the pandemic”.

No wonder, considering that 2020 “saw an increase in unemployment, poverty, indebtedness, and severe economic deterioration”.

In terms of economic growth expectations for this year, Irsheid said that the effects of the pandemic are still present, and that the Russian-Ukrainian war will have negative economic repercussions on the Jordanian economy because the Kingdom imports more than 85 percent of its basic needs and more than 93 percent of its energy from abroad.

"Unfortunately, I do not predict a growth of more than 2.2 percent of GDP, because inflation is expected to climb even higher in Jordan as a result of its heavy reliance on imports, particularly of basic supplies," which, since the start of the Russian war in Ukraine, in late February, have gone up, Irsheid said.

According to economist Wajdi Makhamreh, the GDP growth figure for 2021 is normal, since in 2020 government restrictions contributed to the decline of the Jordanian economy.

Later measures that helped reduce the spread of the virus “directly contributed to improving the domestic product's growth”.

According to Makhamreh, the IMF and the government economic growth projections for Jordan were higher, of between 2.8 percent and 3 percent, but they “were not met since the growth of several sectors, such as tourism and transportation, was slower than planned”.

Despite Jordan's inflation and the implications of the Russian-Ukrainian war, Makharmeh believes that economic growth might reach 2.8 percent this year.

According to him, the efforts of the tourism sector this summer will make a significant difference, “with favorable results appearing in the second half of this year”.

But for Zayan Zawaneh, a political economist, any statistical comparison with 2020 is flawed, as in view of “Jordan's and the world's big crisis, the data for 2020 is exceptional and not accurate enough to be used as a reference and indicator for later years”.

Zawaneh said that 2.2 percent GDP growth rate is decent, but this number has been consistent for several years, “with GDP growth ranging between 1.8 and 2.3 percent in the previous eight years”.

This growth, he added, “does not alleviate Jordan's problems, does not create job opportunities, is smaller than the population growth projection, and indicates that there is a problem that has worsened over the last years that the government has not addressed”.

The 2021 rate of GDP growth may be considered good by some, Zawaneh said, but it is a small percentage that is unable to solve or even address the country's economic problems.

“Jordan's internal problems, in addition to global problems, such as the Russian-Ukrainian war, high rates of inflation, high prices of basic materials, high prices of production inputs, and high energy prices, will all contribute to, maybe, reaching an economic growth level equal to last year or less,” he said, adding that "the matter begins with the current rise in energy prices, and then we will find ourselves in a crisis at the level of the family budget, and subsequently the government budget".

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