Amman: Economists emphasize the importance of leveraging the positive economic indicators achieved in the first half of 2024 and addressing business environment challenges to realize sustainable growth and the objectives of the economic modernization vision.
Speaking to the Jordan News Agency (Petra), experts highlighted the significant impact of regional geopolitical events, particularly the Israeli aggression against Gaza, on key economic sectors such as tourism, trade, investment, and transportation.
Despite these challenges, positive developments have emerged. Jordan’s credit ratings have improved, monetary stability has continued, and foreign reserves have risen to comfortable levels.
Economists suggest enhancing investment incentives, developing infrastructure, supporting local industries and exports, and implementing effective monetary policies to boost economic performance.
Former Finance Minister and economic expert Muhammad Abu Hammour stated that regional upheaval, especially the Gaza war, have
profoundly affected economic developments.
He noted positive indicators, albeit below expectations, and stressed the need for appropriate policies to address negative trends.
Abu Hammour reported that economic growth reached 2 percent in the first quarter of this year, which, while positive, falls short of ambitions. The unemployment rate remains high at 21.4 percent, and total exports by the end of April decreased by 4.3 percent compared to the same period last year.
He highlighted a trade balance deficit increase of 4.4 percent and a decline in licensed building areas and permits by 11 percent in the first five months. Industrial production saw a slight increase of 0.44 percent.
Regarding public finance, Abu Hammour noted that total public debt exceeded JD42.5 billion by the end of May, surpassing 115 percent of the estimated GDP. Revenues grew slightly but did not meet budget expectations, while current expenditures increased, capital expenditures declined, and the budget deficit reached JD655 million
compared to JD490 million during the same period last year.
He commended monetary policy for maintaining exchange rate stability and dinar attractiveness, with foreign reserves exceeding $18.7 billion, enough to cover imports for over eight months. Consumer prices rose by 1.67 percent, one of the lowest rates in the region.
Economic expert Noah Shiyab commented that economic performance in the first half of the year showed no significant improvement. GDP grew by a modest 2 percent, falling short of the 4-5 percent needed for sustainable growth.
The high unemployment rate reflects insufficient job creation due to economic sluggishness. He noted an 11 percent decline in licensed building areas, indicating decreased demand for residential real estate due to financial constraints and high interest rates.
Shiyab also highlighted increased debt levels relative to GDP and a decline in tourism due to regional instability, contributing to weak economic performance. He concluded that the national economy failed to
meet the expected growth outlined in the economic modernization vision.
Board member of the Deposit Insurance Corporation and economic expert Adly Qandah observed mixed economic performance, with improvements in some sectors but ongoing challenges requiring attention to achieve sustainable growth.
GDP grew by 2 percent in the first quarter, with significant growth in extractive industries, agriculture, electricity, water, and manufacturing. Despite the Gaza war and Red Sea trade disruptions, Jordan’s economy demonstrated resilience through sound economic policies.
Domestic revenues increased by 2.3 percent, while the financial deficit reached 428.8 million dinars. Tourism income fell by 6.5 percent, and exports decreased by 4.3 percent, although imports saw a slight increase.
Qandah emphasized the need to enhance investment incentives, develop tourism infrastructure, invest in renewable energy, improve water resource efficiency, and support vocational training and SMEs to reduce unemployment.
He stressed
the importance of boosting exports, supporting local industries, simplifying bureaucratic procedures, and maintaining political and security stability.
Economic researcher Ahmed Majali noted that the first half of the year saw a mix of challenges and achievements. Positive signs included improved credit ratings, monetary stability, and rising foreign reserves.
However, the war on Gaza negatively impacted vital sectors like tourism, trade, and investment, increasing regional uncertainty and dampening investor confidence.
He projected a significant decline in tourism revenues and emphasized the need for economic reforms to enhance financial stability and stimulate growth.
Majali also reported increased shipping and marine insurance costs due to events in Bab al-Mandab, adding to Jordan’s economic burden.
He noted a decline in economic activity across various sectors, influenced by reduced consumer spending and overall demand. He called for further economic reforms to promote stability and growth.
Source:
Jordan News Agency