JSF paper analyses pandemic impact on Jordanian economy

AMMAN — The Jordan Strategy Forum (JSF) on Tuesday issued a report titled “The Jordanian Economy in 2020” as part of a series of reports that it periodically issues to spread awareness about economic and social issues.

The report included a number of observations that reflect the impact of the COVID-19 pandemic on the Jordanian economy in 2020, in addition to presenting recommendations aimed to strengthening the resilience of the Jordanian economy in the coming years, according to a JSF statement.

The report indicated that the Jordanian economy was affected as a result of the pandemic crisis, like other global economies.

The real GDP growth rate witnessed a decrease by 1.6 per cent, and unemployment rates increased significantly, reaching 24.7 per cent in the last quarter of 2020.

The value of bounced cheques (for financial reasons) also increased, reaching JD363 million in 2020, marking an increase of some 33 per cent compared to 2019.

The general index of the Amman Stock Exchange dropped by 13.2 per cent in 2020, a significant drop compared to previous years. The reason for this decline is due to the drop in the index of banks and financial institutions, according to the statement.

Despite the slowdown in the Jordanian economy and the extent of its need to inject more liquidity, the rate of increase in total credit facilities for 2020 was similar to previous years, where the total value of credit facilities for licensed banks in Jordan reached JD28.634 million in 2020.

The construction sector and individuals still represent the largest percentage of users of the total credit facilities at 47 per cent.

There was no significant change in the total deposits of licensed banks and the formation of bank deposits in 2020, where the rate of increase in the total value of deposits was 4 per cent same as in 2019, the JSF said.

The deficit in the trade balance witnessed a downward trend, as the deficit in the Jordanian trade balance (relative to GDP) decreased from 24.4 per cent in 2019 to 20.8 per cent in 2020.

The report attributed this to the decline in the value of imports by JD1.22 billion, as the value of Jordanian exports remained the same at JD5 billion.

The JSF report said that the challenges facing the Jordanian economy were not the result of current circumstances, yet the pandemic contributed to exacerbating them.