Jordan Economic Outlook
Annual economic growth should have waned further in the final three months of 2022. Domestically, private spending will have been dented by the elevated unemployment rate, which was virtually unchanged at 22.9% in Q4 (Q3: 23.1%). This, together with still-intense price pressures, likely provided little breathing room to consumers’ budgets. Consequently, cumulative annual goods imports growth softened further in December, dropping to around 27% from November’s 37%. Additionally, annual industrial output declined at the sharpest pace since February 2021 in December, outweighing October and November’s growth and dragging the overall Q4 expansion below that of Q3. In other news, in late February, the Industrial Partnership for Sustainable Economic Development—including Bahrain, Egypt, Jordan and the UAE—signed 12 industrial agreements worth USD 2 billion in investment.
In January, inflation cooled for a fourth consecutive month to a nine-month low of 3.8% (December: 4.4%), largely due to a high base of comparison. The base effect and tighter monetary policy will continue to exert downward pressure on activity and inflation this year; inflation will cool from 2022 but remain elevated.