AMMAN — The
World Bank and the International Monetary Fund (IMF) said on Monday that the risk
of global recession is growing due to the rise in interest rates and slowing
economies around the world.
اضافة اعلان
Representatives
of the two institutions, WB President David Malpass and IMF Managing Director
Kristalina Georgieva, in their first in-person meeting since the COVID-19
pandemic, said inflation remains a continuing problem after Russia’s invasion
of Ukraine.
In Jordan, the
debate is about whether the Kingdom’s economy is still safe, or has already
tipped into recession.
Economist Mufleh
Aqel told
Jordan News that Jordan is safe “at least until the end of the year”,
in view of the good performance of the tourism and construction sectors.
Aqel believes
that economic aid “would revitalize the economy, although it would not probably
have a great impact on its growth rate”.
“I think the
economy in Jordan will maintain its current level and growth will continue to
modestly increase until the end of this year, since exports are good,” he said,
stressing that “this reduces the likelihood of recession”.
At the same
time, he said, low levels of growth mean maintaining a low level of services
for the people.
Aqel also said
that the core inflation rate, which increases the risk of recession and which
has reached 2.45 percent this year, according to the Department of Statistics,
“resulted from the sharp increase in energy and food prices, but now that wheat
price has decreased, I believe that the situation will be better in the fourth
quarter of 2022”.
Economist Fahmi
Al-Katout, however, believes that “Jordan has already tipped into recession”.
According to
him, the “country’s economy has been in a real crisis since 2010, when economic
growth rates started to drop”.
He said that
between 2010 and 2019, economic growth rates were somewhere between 1.5 and 2
percent, “and this is what recession looks like, when growth rates are much
lower than the population growth rates”.
Katout added
that unemployment rates, which have been steadily increasing until they reached
21.5 percent, “are yet another indicator of recession”.
He added that
during the COVID-19 pandemic, “Jordan suffered from contraction at rates of 1.7
percent, and even after the economy recovered from the impact of the pandemic,
a growth of 1.5 per cent when balanced with a deflation of 1.7 percent would
mean that there is no growth at all”.
“Unemployment is
sharply increasing, the economic growth rate is unchanged, and most
importantly, poverty rates are increasing. All these are indicators of
recession,” he said.
Katout blamed
high taxes, especially indirect taxes, for the current situation.
Economic aid
should be invested wisely to create more jobs and revive the economy, he said,
and “this would break the vicious circle of poor liquidity, weak economic
growth, and weak trade”.
The most recent
issue of the State of the Country report had highlighted the obstacles that
impeded economic reform plans in the country over the last 30 years. It stated
that the reform plans were very costly for the economic growth, employment,
social impacts, and living standards.
Secretary
General at the Jordan Economic and Social Council Metri Mdanat, told
Jordan
News that “80 to 85 percent of the report recommendations were taken into
consideration by the government.”
He noted,
however, that “some recommendations, which have financial implications, usually
get delayed until ensuring liquidity.”
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