Shirkas: The National Economy Shows Resilience and Stability in Facing Challenges

Amman – The Jordan Bankers Association held the 2025 Jordanian Banking Summit on Saturday, under the theme "Resilience and Innovation in the Banking Sector: Adapting to a Transforming Economy."اضافة اعلان

Central Bank Governor Dr. Adel Shirkas, during the event's inauguration, affirmed the banking sector's commitment to standing united behind His Majesty King Abdullah II, commending his courageous stances in defending Jordan's supreme interests, his unwavering support for the Palestinian cause, and his firm rejection of any form of displacement based on the principles of justice and international legitimacy.

He emphasized that the national economy has shown remarkable resilience and stability in the face of regional and international challenges, supported by intensive structural economic and financial reforms implemented by the government in recent years, along with the Central Bank’s consistent monetary policy, which has strengthened Jordan's economic fortitude.

Shirkas highlighted the achievement of several positive economic indicators, particularly in the external sector, which has shown high resilience and outperformed expectations. National exports enhanced their position and entered new markets, growing by 3.8% in 2024 to reach 8.6 billion dinars. Tourism income reached 5.1 billion dinars, supported by increased contributions from expatriate and Arab tourism. Moreover, remittances from Jordanians working abroad grew by 2.8% to reach 2.6 billion dinars.

Regarding foreign investment inflows into the Kingdom, he noted that foreign investments reached 906 million dinars in the first three quarters of 2024, despite the increasing uncertainty in the region.

He added that this has reflected in a real GDP growth of 2.4% during the first three quarters of 2024, with expectations from the Central Bank to maintain the same growth rate throughout the entire year, exceeding IMF expectations, and predicting it to rise to 2.7% in 2025.

Shirkas confirmed that the national economy is capable of facing challenges and progressing towards a more prosperous future, particularly in light of Jordan’s long-term roadmap for comprehensive reform across three tracks: political, administrative, and economic. This reform philosophy has elevated to become the guiding vision from which all actions and reforms in the Kingdom stem, reinforcing the strategic long-term perspective for reform in achieving the objectives of the Economic Modernization Vision.

He reiterated that the primary goal of the Central Bank is to maintain monetary stability, supported by foreign reserves exceeding 21 billion dollars and a decrease in dollarization to 18.4% by the end of 2024, alongside inflation falling to 1.6% with expectations to stabilize around 2% in 2025.

He noted that the recent decision to increase the Central Bank’s capital to 100 million dinars from its own resources is the result of maintaining monetary stability and efficient management of its assets. This will enhance the financial strength of the Central Bank’s capital base, allowing for greater flexibility in managing monetary policy and increasing its effectiveness, in line with the rise in the bank's assets, particularly foreign ones, and its pivotal role in supporting the stability of the national economy.

In his address, the Chairman of the Jordan Bankers Association, Basim Salem, said that the 2025 Jordanian Banking Summit serves as a key platform for discussing banking and economic developments in a changing world, stressing the importance of readiness, adaptability, and innovation in addressing current challenges.

He expressed pride and admiration for the stances of His Majesty King Abdullah II, pointing out his wise vision and leadership, which supports the stability of the national economy and enhances Jordan's position regionally and internationally.

Salem pointed out that the global economy faces increasing challenges due to inflation, changes in central bank policies, and rising economic and geopolitical uncertainties, which force emerging markets to adapt to fluctuations in energy prices and financial disruptions.

He emphasized that the entry of artificial intelligence into markets is reshaping production sectors, enhancing efficiency, but raising questions about the future of the labor market.

He noted that the Jordanian economy grew by 2.4% during the first nine months of 2024, with expectations to rise to 2.9% in 2025, while inflation rates remain low, and most economic sectors showed positive growth, except for the construction sector, which contracted by 1.5%. Exports increased by 5.2%, contributing to reducing the trade deficit, while the unemployment rate decreased to 21.5%.

Salem concluded that these indicators reflect the resilience of the Jordanian economy due to prudent fiscal and monetary policies, which have strengthened international confidence and raised the Kingdom's credit rating for the first time in 21 years.

He emphasized the pivotal role of the Jordanian banking sector in supporting the national economy, highlighting how Jordanian banks have demonstrated their ability to adapt and overcome crises while offering innovative solutions to maintain financial stability.

He also mentioned the rapid developments in digital economy, artificial intelligence, and fintech, which necessitate reassessing banking strategies to enhance innovation, efficiency, and sustainability.

Dr. Mohammad Muhi Eddin, an economic expert, affirmed that the global economy is undergoing significant transformations amid rising geopolitical and economic risks, imposing major challenges on financial and monetary stability in various countries.

He stated that Jordan's economic model and its approach in coordinating monetary and fiscal policies reflect a high level of professionalism and commitment to economic stability.

Dr. Eddin noted that Jordan has achieved good economic stability despite these global challenges, pointing out that strong coordination between the Central Bank and the Ministry of Finance has ensured financial and monetary stability.

He added that Jordan’s economic reforms are keeping pace with global changes, focusing on digital transformation, green investments, and enhancing economic management efficiency, which are essential steps to ensure economic sustainability in the coming years.

He predicted that the Jordanian economy would continue to grow at stable rates, benefiting from improvements in tourism, increased exports, and foreign investment inflows.

Former Minister of Planning and International Cooperation, Dr. Ibrahim Saif, emphasized that Jordan faces significant economic challenges due to its geographic location and demographic pressures resulting from the growing number of refugees. Despite this, Jordan has managed to maintain its economic stability through balanced financial policies and wise resource management.

He clarified that one of the biggest challenges facing the Jordanian economy is the demographic pressure from refugees, as Jordan hosts 1.4 million refugees.

Dr. Saif stressed that Jordan is the second country in the world in terms of the percentage of refugees relative to its population, which places significant pressure on infrastructure, the labor market, and public services, especially in sectors like education, health, and housing.

He added that the Human Development Index in Jordan has seen significant improvement from 1990 to 2020, with advancements in education, health, and infrastructure.

Dr. Saif stressed that Jordan needs a comprehensive development strategy that takes into account demographic changes, enhances the investment climate, and diversifies sources of economic growth to ensure financial sustainability and achieve comprehensive development for all citizens.

Matthew Lawrence, CEO of RFI Global, noted that the financial services sector is experiencing rapid developments driven by digital advancements, fintech growth, and changing consumer behavior amid global economic challenges.

He explained that retaining customers has become increasingly important with the growing competition in the fintech sector, which requires offering tailored services that leverage technology to enhance the customer experience.

Lawrence added that artificial intelligence plays a central role in enhancing security, preventing fraud, and providing personalized services, although its adoption levels vary among financial institutions.

(Petra)

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