Jordan central bank says it's too early to predict impact of coronavirus on economy

Country has 349 cases and six deaths but authorities fear virus could spread quickly

A shopper wears a mask at a supermarket in Amman. Reuters

Jordan's central bank governor, Ziad Fariz, on Monday said it was too early to predict the extent of damage to the economy from an almost month-long lockdown to stem the coronavirus outbreak.

"The forecasts of growth are premature," Mr Fariz told Jordan's Al Mamlaka TV news channel.

"It's difficult to predict the extent of the negative impact on the growth rate."

But he said the crisis had resulted in a sharp drop in demand and production, and that the once-thriving tourism sector would require at a least a year to recover.

The International Monetary Fund, which last month approved a four-year, $1.3 billion (Dh4.78bn) programme for Jordan, had expected its economy to grow about 2.1 per cent in 2020 but gradually rise in the next few years to 3.3 per cent.

Officials worry that the effect of the crisis on tourism, which generates about $5bn annually, would slash growth projections and deepen an economic downturn and a slowdown in domestic consumption that was evident before the outbreak.

"For nearly a month now the Jordanian economy has nearly stopped," Mr Fariz said.

The country has been quicker than most in the region to take drastic measures to stem the spread of the virus by imposing a tight lockdown that has brought large sectors of the economy to a standstill.

Jordan has stopped all international flights and closed all border crossings for passenger travel with Syria, Iraq, Israel and Saudi Arabia, and imposed a curfew under severe emergency laws.

Jordan has 349 cases and six deaths but the authorities fear the virus could spread quickly.

The central bank took measures last month to ease the effect by reducing interest rates.

It cut compulsory reserves for commercial banks to inject more than 500 million dinars (Dh2.58bn) of extra liquidity.

It also prodded banks to extend another 500m dinars at interest rates that do not exceed 2 per cent to help companies hurt by closures.

A main concern was keeping industry and small businesses from faltering, Mr Fariz said.

He said a resilient banking sector with more than 30bn dinars in deposits underpinned the country's monetary stability.

The government said it was looking at reopening some industries and small businesses that have been closed since the lockdown to try to ease the impact on the economy.

Mr Fariz said the kingdom, which imports all of its energy needs, could benefit from a steep drop in oil prices as the coronavirus pandemic hits demand.

"The reduction in oil prices reduces the burden on the economy," he said.