Amidst a turbulent regional politicaland security environment, Jordan wrestles with sluggishgrowth and high unemployment. A number of risks materializedin 2015, particularly related to security spillovers andtheir negative impact on tourism, construction, investmentand exports. As such, the economy slowed down for the firsttime since 2010, further widening Jordan’s output gap, withgrowth declining from 3.1 percent in 2014 to 2.4 percent for2015. However, growth remained otherwise broad-based. Thelargest contributions to growth came from ‘finance andinsurance services’, ‘transport, storage andcommunications’, ‘producers of government services’,‘electricity and water’ and manufacturing sectors althoughit was ‘mining and quarrying’ and ‘electricity and water’that saw the highest growth rates in 2015. Unemploymentreached an average of 13.0 percent in 2015, 1.1 percentagepoints wider compared to 2014. Growth is projected torebound slightly, to an average of 3.3 percent over2016-2018, provided no further spillovers from the Syriancrisis occur. Chiefly, Jordan will need to continue managingrepercussions from the regional security and politicalsituation, and the challenges of hosting 1.37 millionSyrians (of which 639,704 registered refugees).Additionally, since Jordan benefits from the GCC forremittances, exports, FDI and grants, large sources offoreign exchange - persistently low oil prices are a riskfor Jordan this year and in the medium term. Weak globaldemand may impact demand for Jordan’s mining exports.Furthermore, the willingness and speed of reformimplementation particularly to improve the business climatewill be crucial to attract Jordan’s investment aspirations.
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