Jordan has ‘made progress’ in energy sector — EBRD

(File photo: Jordan News)
AMMAN — The European Bank for Reconstruction and Development (EBRD) said that Jordan’s economic recovery continued steadily in 2021, and that the GDP rose to 2.5 percent, from 2.2 percent, in the first quarter of this year, supported by the growth of the services and tourism sectors, according to Al-Mamlaka TV.اضافة اعلان

The EBRD said in a report that Jordan “made progress” in important reforms in the energy sector, as the government completed a comprehensive review of energy purchase agreements, and adopted a three year electricity tariff reform plan.

The bank praised Jordan for increasing its targeted support to citizens, in response to the rise in global fuel and food prices, noting that the government partially eased the burden of high energy prices in the first quarter of this year by reducing fuel taxes to achieve price stability.

“However, the fiscal space is limited, as last year the government deficit reached 5.4 percent of GDP, and the public debt reached 113.8 percent of GDP at the end of the year,” the report said.

“Therefore, the government is phasing out indirect comprehensive aid and heading instead toward increasing the targeted support for the poorest families,” the report added.

It referred to the government’s announcement last August of a mechanism of paying JD30 million as fuel subsidies to beneficiaries of the National Aid Fund, university students, and workers in the public transport sector, explaining that cancelling the comprehensive aid in favor of support directed to vulnerable groups, combined with higher-than-expected revenues keeps the primary deficit target of 3.4 percent of GDP in 2022 within reach.

The European bank also praised the launch of the Economic Modernization Vision, through which Jordan aims for higher economic growth and the creation of 1 million additional jobs, with a focus on promoting high-value industries, addressing food and energy security, and supporting sustainable development.

The report added that unemployment in Jordan “is still high, and inflation is accelerating due to high energy and food prices”.

It called for addressing high unemployment rates and low female participation in the labor force, stressing that reforms will encourage private investment, especially in labor-intensive sectors, which will contribute to job creation.

Even though unemployment decreased slightly in the first quarter of 2022, it is still high at 22.8 percent, and disparities in unemployment between men (22.4 percent) and women (30.7 percent) are significant; higher rates are to be found among youth (36.4 percent) and graduates (32.6 percent), the report said. 

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