Economists foresee higher GDP growth rate in light of gov't easing measures

AMMAN — Jordan’s Gross Domestic Product (GDP) grew in the second quarter of this year by 3.2 per cent, compared with the second quarter of last year 2020, according to data from the Department of Statistics (DoS).

Economists confirmed that the GDP growth in the second quarter of this year indicates that the national economy has begun to recover from the pandemic's repercussions.

The construction sector achieved the highest growth rate during the same period at 5.7 per cent, followed by the extractive industries sector at 5.4 per cent, according to the DoS. 

The transportation, storage and communications industries grew by 4.3 per cent, while the manufacturing industries grew by 3.9 percent, and the wholesale and retail trade, hotels and restaurants sector grew by 3.8 per cent, according to the data.

Political economist Zayan Zawaneh said there are many factors that affect the growth of GDP, one of the most important being the reopening of the economic sectors and the lifting of pandemic-imposed restrictions.

He added that improving tax revenues and overall exports also affected the growth of GDP.

"The psychological and political economics have also improved during the second quarter of this year, as the diplomatic activity led by His Majesty helped improve the economic conditions, whether the US ally, the Russian friendship or the new Arab bond between Jordan, Iraq and Egypt, the New Levant,” Zawaneh told The Jordan Times on Sunday during an interview over the phone.

Zawaneh noted that all those factors played a huge role in giving the Jordanian economy a “major boost”, and helping the economy enter a new phase globally and regionally, where there is hope for a process of regional political and economic integration.

Zawaneh pointed out that the diplomatic endeavours must be “accelerated” to help get the economy back to how it was prior to the pandemic and to keep the growth during the upcoming years.

“It is hard to tell what will happen in the third quarter of this year as there will be many elements that will affect the economy, both nationally and regionally,” he said.

Economist Mazen Irsheid said that the Kingdom’s GDP growth was “expected",especially compared with the year 2020, which was economically “the worst year” in Jordan’s history.

"Since the beginning of September, the national economy recorded a greater growth than the beginning of the year, and it is expected that GDP would grow by 4 per cent by the end of the year due to the reopening of the economic sectors after the continuous closures,” Irsheid told The Jordan Times on Sunday.

According to Irsheid, the level of economic growth is expected to return to what it was in the next two years.

"Despite the current growth, the numbers are still lower than they were in 2019, but next year is expected to be much better than this year,” he said. 

The numbers will likely begin to return to how they were prior to the pandemic, said Irsheid. 

He stressed the importance of opening the borders with Syria for Jordan, as trade exchange will improve, which will “significantly” help the economy.

Eyad Abu Haltam, a member of the board of directors of the Amman Chamber of Industry, said that the improvement in the economic growth proves that the national economy is returning to its previous state.

He expects that growth during the third quarter of this year will be better as well, the Jordan News Agency, Petra reported.

Abu Haltam stressed that the construction sector, which achieved the highest growth rate, is evidence of the increased demand for real estate.This also increases demand in many other related sectors, especially the industrial sector, according to Petra.

"Continuing growth requires effective plans from the government, in partnership with the private sector, and a rapid implementation of the government's economic priority programme, especially with regard to establishing a fund to support the industrial sector, which will contribute to increasing exports and reducing operating costs,” Abu Haltam told Petra.