jordan pulse -

The European Bank for Reconstruction and Development (EBRD) predicts that the indirect effects of the prolonged war on Gaza will slow down growth from 2.6% in 2023 to 2.4% in 2024, despite strong growth.

The report released on Wednesday added that these forecasts and the impacts of the Israeli war on Gaza reflect a decrease in the number of tourists coming to Jordan, a decline in investment flows, and a postponement of consumer spending during a time of uncertainty.

The EBRD expects a slight recovery in economic growth to 2.6% in 2025, “provided that geopolitical conditions improve,” which includes the repercussions of the war.

The report noted that unemployment in Jordan remained high, averaging 21.4% in the last quarter of 2023, with higher rates among women (29.8%) and youth (42.4%).

It also mentioned that inflation rose slightly at the end of last year, reflecting an increase in the prices of some basic food items, before declining to 1.6% in March 2024.

The report praised the policies of the Central Bank of Jordan in maintaining interest rate stability since July 2023, following a series of increases in line with decisions by the U.S. Federal Reserve.

Accelerated Regional Growth -
Regionally, the EBRD forecasts an accelerated growth of 3.4% in the gross domestic product (GDP) for 2024 in the Southern and Eastern Mediterranean region, according to the latest report on regional economic prospects.

Growth in the region is expected to accelerate from 2.7% in 2023 to 3.4% in 2024 and 3.9% in 2025, as economic stabilization programs and reforms come into effect.

The report indicated that the region has shown resilience in the face of the war on Gaza and escalating political and security tensions in recent months, although Jordan experienced “a decrease in tourism and investment,” while Tunisia continued to suffer from financing constraints.

The support provided by the International Monetary Fund (IMF) and international donors has contributed to the macroeconomic stability in Egypt, Jordan, and Morocco, and inflation rates have declined across the region, except in Egypt where it remained above 30%. The region is generally on the right track towards adjusting public finances in 2024, aiming to maintain growth-enhancing investment and targeted social protection.

Since 2012, the EBRD has provided over two billion euros in financing through 71 projects in Jordan, including financial support for the Jordanian banking sector through loans to small and medium-sized enterprises, secondary debt, and trade finance facilities.