KEY MESSAGES
Jordan's economy showed continued resilience in 2023 and early 2024, according to a new World Bank report released today. Real GDP edged up to 2.7 percent in 2023. While this is a modest increase from 2022, it was achieved amidst a challenging regional environment and driven by a broad economic base. Manufacturing growth hit a record high, agriculture and services also had robust performances, and restaurants and hotels saw some of their highest growth rates of recent years.
The World Bank's latest Jordan Economic Monitor Report provides an overview of Jordan's recent economic performance and projects the outlook ahead. It finds that inflation in Jordan has decelerated significantly, dropping to 2.1 percent in 2023, and is expected to remain contained throughout 2024.
In terms of the labor market, unemployment has slightly decreased for the second consecutive year, coming in at a rate of 22.0 percent and was further reduced to reach to 21.4 percent in Q1-2024. Labor force participation rates remain largely stagnate, especially for women and youth. However, a more recent positive signal emerged in the first quarter of 2024 as the female participation rate reached 15.5 percent; the highest level since the third quarter of 2018.
Jordan continues its efforts on fiscal consolidation, and significantly narrowed the deficit to 5.1 percent of GDP in 2023. The decline was driven by lower expenditures, which outweighed a drop in revenues as tax revenues and foreign grants declined. The current account deficit has also declined, supported by a lower trade deficit and a record high travel receipts that reached 14.5 percent of GDP in 2023.
The report also looks at the impact of the conflict in the Middle East on Jordan's economy. It finds that the economic impact so far has been relatively contained. The greatest impact is coming from trade disruptions in the Red Sea, which have affected imports and exports through the Aqaba port, and on tourism, with a sharp decline in tourist arrivals since the last quarter of 2023.
Jordan's growth is projected to slow slightly to 2.4 percent in 2024, primarily due to these impacts of the conflict on tourism, trade, transportation, and construction.
- Jordan Economic Monitor, Summer 2024: Strength Amidst Strain: Jordan’s Economic Resilience (Full Report in a PDF Format)