Pundits say national economy macros positive, urge focus on pre-pandemic woes

[22-12-2021 01:09 PM]

Ammon News - Pundits have said the macroeconomics of the national economy in 2021 are positive despite the fallout from the coronavirus pandemic and urged the government to focus on the economy’s deep-seated woes, particularly unemployment, debt and sluggish capital investment growth.

While agreeing that the economy has been on an upward trajectory in much of 2021, economists and former officials said the pandemic had deepened and even prolonged the economy’s chronic pain points.

Nevertheless, according to projections by the Central Bank of Jordan, the economy grew by 1.8 percent in the first half of the current year and is set to have gained further traction in the second half of the year.

In an interview with Petra, Muhammad Abu Hamour, a veteran economist and former minister, said it is true that the national economy saw some improvement in 2021 but growth rates do not promise a tangible improvement in the average citizen’s living conditions because growth rates are at same pace with population growth.

Abu Hamour said this year’s growth was "good", hoping that the government delivers on a recovery plan it has announced earlier. He stressed the need for clear-cut performance indicators to measure and evaluate growth.

Adali Qandah, an economist, said the national economy’s 2021 performance was "mixed". Despite an accelerating growth pace, he added, the economy remains burdened with several problems, echoing the same ones cited by Abu Hamour, that is, unemployment and inflation.

The fact that growth has returned to the green zone does not mean that the economy has fully recovered, Qandah added. He explained that most of the economic and social indicators that affect the daily life of citizens have declined and exacerbated, such as poverty, unemployment, water deficit, energy deficit, public transport, and others.

The economist considered that decision-makers always pull traditional economic policy tools, the results of which, according to Qandah, are often marginal and do not lead to any positive and groundbreaking changes in the structure of the economy, expecting that there will not be any leaps in macroeconomic performance to a degree that is reflected on the citizen.

Qandah stressed that there are indeed financial, monetary and economic policy tools available, but they are "disabled or abandoned and neutralized", which, if used intelligently, according to the expert's description, would have brought about significant improvements in various economic sectors and in the various governorates of the Kingdom.

In turn, Majd Shafiq, an economist and financial expert, saw that the national economy performed better in 2021 compared to 2020, but it is still under the influence of the pressures of the pandemic, like other developing and emerging economies in the world.

He cited some positive economic indicators, including higher exports, and larger corporate profits, indicating that a prudent monetary policy pursued by the Central Bank had a significant impact on strengthening foreign reserves.

Shafiq said: "The challenge of unemployment and the need to find job opportunities for relatively large numbers of citizens who enter the labor market annually is not easy to deal with if the rate of growth of the gross domestic product remains less than the rate of the natural increase in the population and if the growth rate of labor productivity remains in the negative, as is the case now".

According to recent statistics, local revenues rose in January-October 2021, to about JD963.1 million, or 17.8 percent higher than the figure recorded in the same period last year.

The unemployment rate decreased in the third quarter of this year 2021 by 1.6 percent to 23.2 percent.

The gross domestic product, at constant market prices, grew by 3.2 percent in the second quarter of 2021, while total exports rose during the past nine months to reach JD4.71 billion.

By the end of November, tourism income rose by 78.5 percent to $2.4 billion, with the number of tourists increasing by a similar rate, 78 percent, to reach 2.109 million tourists. The value of foreign reserves with the Central Bank amounted to about $17.1 billion.


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