The role of the Central Bank of Jordan in Jordan in mitigating the economic impacts of the Corona pandemic

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  role of the Central Bank of Jordan in Jordan in mitigating the economic impacts of the Corona pandemic-

  The COVID-19 pandemic poses a severe economic and social shock on all countries alike, and Jordan is no exception. Yet the impact on Jordan’s economy is further amplified as the country was already moving along a low growth trajectory amid high youth and women unemployment rates. The pandemic is likely to lead to a deep global recession that could potentially be protracted, in part due to the lingering health risks. According to the report, the Jordanian economy is projected to contract by 3.5% in 2020. This compares to a forecasted contraction of 4.2 percent for the MNA Region and a contraction of 5.2 percent for the World economy according to the World Bank’s June 2020 Global Economic Prospects. This negative impact is expected due to various channels, in particular trade, remittances, tourism, as well as the service sector. There are major downside risks to this projection as some countries have difficulties getting the first wave of the pandemic under control while others could face a second wave. Given the services-oriented nature of its economy, Jordan is expected to gradually recover while still remaining below its long-term trend.

  Over the past few years, Jordan has laid the foundation for a more sustainable and inclusive growth through its Five-Year Reform Matrix to set Jordan on a growth path, focusing on creating jobs, especially for youth and women. The Government, with support from the World Bank, has already made important progress with the implementation of key reforms in the area of labor market, social safety nets, private sector competitiveness and governance. Faced with new challenges from the COVID-19 shock, steadfast focus on key structural reforms in agriculture, tourism, trade facilitation, support to SMEs, digital transformation as well as improving the business environment and access to finance can help Jordan accelerate its recovery and further strengthen resilience.

  The Jordan Economic Monitor also includes two Special Focus sections. “Women and Work in Jordan” and “Jordan Jobs Diagnostic”. The sections examine the causes behind weak job creation, particularly for women and the youth, and the low female labor force participation, where Jordan scores below regional and international standards. The report calls for critical legal and regulatory reforms to the work permit system to reduce informality, revision to wages and compensation schemes of the public sector in contrast to those of the private sector, and improvement in the business environment, specifically for young firms so that they can grow and create much needed jobs. The sections also emphasize the need to address some of the barriers holding back women from accessing the job market such as the lack of adequate childcare services, poor public transportation conditions, gender related wage gaps, and social norms that imply certain societal expectations to the role of women.