The World Bank projected Jordan's real GDP to contract by 3.5% in 2020 and to post its worst economic recession since 1989, mainly due to the impact of the COVID-19 pandemic. It noted that the country is facing significant socioeconomic challenges due to the virus outbreak, which has added to the economy's already low growth trajectory and elevated unemployment levels. It anticipated real GDP to grow by an average of 2.1% annually over the medium term, in case of sustained prudent policy measures and support from the international community. But it noted that the economy will continue to operate below its growth potential, given its deeply-entrenched structural weaknesses. 

In parallel, it expected the pandemic to severely weigh on Jordan's public finances and external imbalances in 2020. It projected the fiscal deficit to widen from 4.7% of GDP in 2019 to 7.2% of GDP in 2020, due to a significant drop in revenues and an increase in virus-related expenditures. As such, it anticipated the public debt level to rise from 99% of GDP at end-2019 to 111% of GDP at end-2020, and to remain vulnerable to growth- or fiscal-related shocks. Also, it projected the current account deficit to widen from 2.8% of GDP in 2019 to 5% of GDP in 2020, due to a sharp decline in export and tourism receipts that will offset the impact of lower oil prices. It expected the deficit to gradually narrow to about 4.5% of GDP annually over the medium term. It forecast remittance inflows to decline by 15% in 2020, as they are largely sourced from oil exporting economies. 

In addition, the World Bank indicated that risks to Jordan's macroeconomic outlook are significant and include a prolonged duration and magnitude of the COVID-19 pandemic, as well as heightened regional uncertainties. It added that the government could face challenges to meet its gross financing needs given the deterioration in global liquidity conditions, which could further increase the country's reliance on official inflows. 
Source: World Bank