Economic woes see World Bank downgrades Jordan to lower-middle income country

Economic woes see World Bank downgrades Jordan to lower-middle income country
While the World Bank noted the downgrading was due to a revision in the population estimate of Jordan by the United Nations Population Division, it also gives insight into Jordan's economic issues.
2 min read
05 July, 2023
Jordan has been grappling with high levels of unemployment, with youth unemployment at 46% [Getty]

The World Bank has downgraded Jordan to the status of lower-middle-income country in a recent revision of its classification data.

The report, which was released on 30 June, declared that Jordan was the only country to receive a downgraded classification, moving it from upper-middle income status to the lower-middle income category.

The report cited an 8.6 percent upward revision on Jordan's population estimate by the United Nations Population Division, as the main reason for the downward classification.

Seven other countries received an upward classification in the report.

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Ahmed Awad, the director of the Phenix Center for Economic and Informatics Studies, told The New Arab that the downgrade reflects the "fragility" of Jordan's economy and "weakness in economic management".

"Jordan's decreasing rank in this criterion reflects is economic and social reality," Awad said. "There has been a notable increase in unemployment rates, reaching 22 percent, and poverty rates, rising to 24 percent."

Youth unemployment for people under-25 is currently marked at 46.1 percent, according to the World Bank.

The World Bank has four income groupings ranging from low-income, low-middle income, high-middle income, and high-income. Countries are categorised mainly by gross national income (GNI) per capita in US dollars. It revises these groupings each year.

Awad also noted that the downgrade was not just due to the aftershocks of the Covid-19 pandemic and current regional economic difficulties.

He highlighted that the challenges facing Jordan's economy were also influenced by "economic choices pursued by successive Jordanian governments" which have gone "towards reducing the budget deficit at any cost".