Ammon News - The European Bank for Reconstruction and Development (EBRD) said Jordan's economic growth is expected to rebound to 1.5 per cent in 2021.

According to its latest Regional Economic Prospects, published Tuesday, the EBRD indicated that the growth is owed to the lingering effects of the pandemic, a lackluster recovery in tourism and fiscal tightening to rein in the Kingdom's growing public debt.

In 2020, the Jordanian economy contracted for the first time in 30 years, shrinking 1.6 per cent according to the Jordanian government’s estimates, the statement pointed out. It said that the financial and agriculture sectors were the principal sources of growth, tourism, the main driver of growth in recent years, declined 76 per cent on the year.

In 2022, growth is seen picking up to 2.2 per cent as Jordan advances reforms and global tourism resumes. The main risks to the outlook include the erosion of competitiveness, regional instability and a slower-than-expected recovery in partner economies, the report noted.

The EBRD also raised its economic growth forecast for the southern and eastern Mediterranean (SEMED) region to 3.5 per cent in 2021. The return to growth follows a 2.1 per cent decline in gross domestic product (GDP) in 2020. However, the Bank warned that the speed of recovery would vary from economy to economy, reflecting the slow recovery in tourism, mounting fiscal pressures and political uncertainty across the region.

For 2022, the EBRD economists expect continued growth of 4.6 per cent, provided the region’s economies are supported by structural reforms, a recovery in foreign investment and stronger trade flows.