Domestic recovery expected, despite global snags

An aerial view of the Jordanian capital. (File Photo: Ameer Khalifeh/Jordan News)
AMMAN — The World Bank projected Jordan’s economy to grow by 2.1 percent in 2022, but rising commodity prices, supply chain bottlenecks, and the impact of the war in Ukraine pose significant risks to the country’s economic outlook.اضافة اعلان

The bank said in a statement Monday that the forecast depends on the relatively strong growth rate of 2.2 percent recorded in 2021 due to the government’s monetary and fiscal policies. Other reasons included the gradual revival of economic activities in the wake of the COVID-19 pandemic.

But unemployment, particularly among young people and women, remained at alarming levels, and reforms are needed to stimulate investment and create jobs.

Economist Zayyan Zawaneh concurred with the World Bank report. He said that Jordan’s economic recovery was slow, but steady.

“The report focused on the actual challenges we face: unemployment, especially among the youth, indebtedness, human capital development, and the need for structural reforms,” Zawaneh told Jordan News.

“I wish the report would also mention education, health, energy, transport, and the labor market,” he added, referring to shortcomings in these sectors.

He said he specifically agreed with the report’s reference to high energy and food prices, which put significant pressure on the state budget as well as the ability of Jordanians to provide for their families.

Another economist, Mazen Irsheid, referred to the difficult global economic condition and its effect on the Jordanian economy. He said that included the high inflation in strong economies worldwide and its repercussion on the Jordanian economy, and a wave of interest rate increases by global banks and the Central Bank of Jordan, which bore negative consequences on Jordan’s economy.

“Despite the circumstances, the report is positive and there is logic in the report, where improvement in the services sector has been evident, especially in the tourism sector,” he said.

“We hope that there will be an improvement in other sectors, especially the industrial, such as the potash, phosphate, and mining because they are essential tributary to the state’s treasury through taxation,” Irsheid said.

He described Jordan’s high unemployment rate as a “major challenge”.

“Since the pandemic, it has not changed,” he said. “We need a flow of high-volume and sustainable foreign investment to create jobs and alleviate the unemployment crisis.”

Salameh Al-Darawi, another economist, said the World Bank’s expectation that Jordan’s economy would grow was “normal, not high and within the expected rates”.

He said foreign investment in Jordan “is strategic and important”.

“But we still need to revitalize the investment environment by simplifying procedures and creating incentives for investors”, he said. He explained more investments will help eliminate the country’s unemployment crisis.

He said he hoped that new investment bill, which is expected to be legislated when parliament reconvenes for a summer session as of Wednesday, “will be an essential tool in promoting the investment environment”.

The Committee on Economy and Investment in the Lower House of Parliament promised a national dialogue with private sector institutions to take the necessary notes and amendments into consideration with the ultimate goal of attaining a competitive modern law that changes the reality of the investment environment in the country and puts Jordan on the world map.

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