Jordan continues to face a very difficult regional environment. The conflicts in Syria and Iraq—which led to a massive influx of refugees—have resulted in the closure of Jordan’s main land trade route, and have had an adverse effect on socioeconomic stability. Moreover, the fiscal retrenchment and tighter liquidity in neighboring oil exporting countries have weighed on remittances and capital inflows. These developments have depressed investment sentiment, undermined growth, and led to a further increase in unemployment.
Despite these unprecedented challenges, the Jordanian economy has remained resilient. The authorities’ reform agenda—which is supported by the EFF—rightly aims at maintaining macroeconomic and financial stability, and at reviving growth and employment. The need to undertake a significant fiscal adjustment and structural reforms during a period of heightened demands associated with developments in the region has added to these challenges. The difficult internal and external environments are likely to persist as the conflicts in Syria and Iraq do not show signs of abating nor has the GCC economic outlook improved.