Unlike other Middle East countries, the Hashemite Kingdom of Jordan does not rely much on natural resources because water and hydrocarbon resources are not easy to find in this country. As a result, the government is trying to boost its exports by welcoming international trade and fostering good diplomatic relations with other countries. Unfortunately, the pandemic of COVID-19 that hit the nation has caused a serious impact on the Jordanian economy, including its exports.
Jordan’s Economy and Exports Before the Pandemic of COVID-19
Jordanian economy has suffered from a low growth rate for several years due to various factors, such as the influx of Syrian refugees. In 2019, the GDP growth was at the level of 2%, in which it is 0.1% higher from the previous year. About one-third of Jordan's GDP is from the revenue generated by exports of services and goods.
It is estimated that Jordan has shipped US$ 6 billion worth of goods, such as textile, inorganic chemicals, minerals, and fertilizer, to many countries in 2019. About 60% of the exported goods were delivered to Asian countries, such as Saudi Arabia, Syria, Iraq, and India. Moreover, Jordan also exports various goods to the U.S.
However, the export value is not as high as the previous year, that accounts for US$ 7.7 billion. Besides, Jordan also suffers from a trade deficit in the same year. The country relies heavily on hydrocarbon imports. From January to September 2019, the trade deficit of this country accounts for US$ 8.1 billion that is 13.4% lower than the previous year.
Economy and Exports in Jordan amidst the Pandemic of COVID-19
COVID-19 outbreak in Jordan started in March 2020. It forced the government to implement various measures, such as restriction of movement, suspension of international flights, and closure of schools, universities, and businesses, to limit the spread of the infection. Later on, the government decided to reopen the economy in April.
The pandemic affects the Jordanian economy hard. In the first quarter of 2020, the GDP growth is at the level of 1.3%. Meanwhile, the economic growth shrank 3.6% y-o-y in the second quarter of 2020. The most affected sectors were constructions (-6.3%), social & personal services (-6.4%), transport & communications (-9.2%), and hotels & restaurants (-13.4%). However, growth was recorded in agriculture, insurance, finance, and real estate sectors.
Despite the economic condition of this country, exports in Jordan gradually recover from this challenging situation. In April 2020, the export value of this country is only about US$35.2 million. However, in July of the same year, the amount increased to more than US$806 million.
Therefore, it can be concluded that exports in Jordan will survive despite the challenges caused by the COVID-19 pandemic. IThanks the economic measures, such as tax relaxation, the government took by the government to reduce the economic impact of the COVID-19 virus. Moreover, the country also gets emergency financial assistance from the IMF. It is expected that the Jordanian economic growth will be at the level of 3.7% in 2021.
