AMMAN — Director of the International Monetary Fund (IMF) Middle East and Central Asia, Jihad Azour, released the IMF’s report on the region on Tuesday, pinning hopes that Jordan’s openness and regional cooperation with neighboring countries would contribute to economic recovery.
اضافة اعلان
“We look forward to regional cooperation with neighboring countries, Egypt, Iraq, Syria, Lebanon, and others, to return to activity and to provide an additional positive space for the Jordanian economy to return to a gradual recovery,” he said in a Tuesday press conference.
He told the Jordan News Agency, Petra, during the conference that the Jordanian government’s measures to protect the health of citizens, and expedite the vaccination process mitigated some of the pandemic’s effects on the economy.
Azour said that Jordan was able, despite economic conditions, to achieve economic stability and continue to carry out structural reforms in order to begin recovering economically this year.
With regard to unemployment rates, he pointed out that Jordan, like other countries in the world, suffered from high unemployment rates due to the pandemic, which exceeded 24 percent, compared to 19 percent expected next year, which requires the continuation of structural reforms to raise production capacity and the ability of the private sector to increase job opportunities.
The director stressed the need to reduce the cost of production in the Jordanian economy, specifically energy costs, as well as reduce the rate of deductions taken out of workers’ salaries for social security.
‘Fragile’ regional recovery
Regionally, the IMF said that the Middle East and North Africa are on track for recovery, but rising social unrest and increasing inequities threaten the “fragile” progress of low-income economies, the AFP new service reported on Tuesday.
The MENA region saw real GDP growth shrink by 3.2 percent in 2020 due to weak oil prices and sweeping lockdowns to halt the spread of the coronavirus.
But with rapid vaccination campaigns, especially in oil-rich Gulf nations, the International Monetary Fund predicted gross domestic product growth would rise to 4.1 percent this year, up 0.1 of a percentage point from its last projection in April.
“The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance,” said Azour, adding recovery is not the same in all countries.
“It is uncertain and uneven because of the divergence in vaccination, recent developments, increase in prices ... but also the uncertainty about the global financial conditions and the risk of change in interest rate conditions, (and) geopolitical developments,” he told AFP.
In a report, the IMF said that while the prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries were witnessing “fragile” recoveries.
It warned of “a rise in social unrest” in 2021 that “could pick up further due to repeated infection waves, dire economic conditions, high unemployment, and food prices.”
Algeria, Iraq, Lebanon, Sudan, and other countries have witnessed protests by thousands of angry citizens demanding reforms, better jobs and services.
Increasing inequities
The IMF warned of the longer-term risk of an uneven recovery, which could lead to a “permanent widening of existing wealth, income, and social gaps and, ultimately, weaker growth and less inclusive societies.”
About 7 million more people in the region are estimated to have entered extreme poverty during 2020–21 compared with pre-crisis projections, according to the IMF.
They are grappling with rising prices as inflation in the region is projected to increase to 12.9 percent in 2021 from 10.4 last year, pushed by higher food and energy prices in some countries, before subsiding to 8.8 percent in 2022.
“Inequities are increasing. The low-skilled, the young, women, and migrant workers have been affected the most by the pandemic, as have smaller firms, particularly those in contact-sensitive sectors,” said the report.
According to the international lender, the corporate sector has recovered to pre-pandemic levels, but smaller firms and those in “contact-sensitive sectors” are lagging behind.
“Fifteen to 25 percent of firms may need to be restructured or liquidated,” it added.
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