Jordan COVID-19 Impact - CGE and Micro-simulation analysis 2020 - Report Summary

Jul 19, 2026

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A fiscal public expenditure review background paper forecasts how the 2020 COVID-19 crisis affects Jordan’s economy and household welfare, considering both lockdown and trade shocks. It uses a theory-based Computable General Equilibrium (CGE) model to generate 2020–2024 projections and evaluate policy scenarios (likely vs. severe). A dynamic micro-simulation model estimates impacts on poverty and household welfare based on sectoral and household data sources.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages34

Reading Time1 h 26 min

Summary

Modeling approach: CGE and micro-simulation

Economic projections and policy scenarios

Poverty and household welfare impacts

Mitigation measures and further policy options

Public Disclosure Authorized Public Disclosure Authorized HASHEMITE KINGDOM OF JORDAN: COVID-19 IMPACT Jordan COVID-19 Impact: CGE and Micro-simulation analysis 2020 A Fiscal Public Expenditure Review (FPER) report is being produced for the Hashemite Kingdom of Jordan. The work is led by Saadia Refaqat (Task Team Leader and Senior Economist, Macroeconomics, Trade and Investment Global Practice) under the direction of Eric Le Borgne (Practice Manager, Macroeconomics, Trade and Investment Global Practice), Saroj Kumar Jha (Country Director, Middle East and North Africa Region) and Nadir Mohammed (Regional Director, Middle East and North Africa Region) . This paper has been authored by Saadia Refaqat (Task Team Leader and Senior Economist, Macroeconomics, Trade and Investment Global Practice), Matthew Wai-Poi (Senior Economist, Poverty and Equity Global Practice), Laura Rodriguez Takeuchi (Young Professional, Poverty and Equity Global Practice), Peter Griffin (Consultant, Macroeconomics, Trade and Investment Global Practice) and Matthew McCartney (Consultant, Macroeconomics, Trade and Investment Global Practice), with research support from Yifan Zhang (Consultant, Trade and Investment Global Practice) and Anastasia Janzer-Araji (Consultant, Macroeconomics, Trade and Investment Global Practice). The paper serves as a background paper for the FPER. The paper seeks to forecast the impact of the 2020 COVID-19 pandemic-crisis on the economy and household welfare of Jordan, various mitigation measures the Government of Jordan (GoJ) has undertaken as well as potential further measures they can undertake to mitigate the impact of the shock. The paper is based on SUT/IO table covering 23 sectors for 2010, Household Expenditure and Income Survey for 2017-2018 provided by the Ministry of Planning and International Cooperation, data from the UN COMTRADE database for 2016 and data on tourism from the 2016 Tourism Satellite Accounts produced by USAID. The team also benefited from several publicly available sources of data from the Government of Jordan, and the World Bank Group. Questions or comments may be directed to Saadia Refaqat at [srefaqat@worldbank.org](srefaqat@worldbank.org). The contents of this note are strictly confidential and cannot be disclosed without written permission. Summary The COVID-19 pandemic is impacting Jordan’s economy through an unprecedented mix of lockdown and trade shocks. This paper seeks to forecast the impact of both shocks on the economy and household welfare of Jordan. We adopt a Computable General Equilibrium (CGE) model of the Jordanian economy. The rich theory-based CGE model allows us to produce forecasts from 2020 to 2024 for key macroeconomic variables and simulate the effects of policy measures. More specifically, we specified two scenarios – likely and severe – to fully capture the outlook risk in Jordan. A dynamic Micro-Simulation (MS) along with the CGE model is simultaneously prepared and calibrated to estimate the impact on household welfare. Jordan’s economy even before the COVID-19 shock was expected to remain on a low growth trajectory – however permanent losses from the shock could carry over the medium-term. Jordan is facing significant multifaceted socio-economic challenges in the aftermath of the COVID-19 pandemic. These challenges are further amplified by the fact that the country is already moving along a low growth trajectory amid high youth unemployment rates for the last decade even prior to the shock as a result of due to deep-rooted structural weaknesses. In the likely scenario, we forecast that Jordan will experience aV-shaped economic recession along with a relatively quick recovery of global trade, Jordan’s economy is projected to decline by 6.2 percent in 2020, when considering current mitigation policies. These mitigation policies include adjustments in the public sector wages (nominal), reduction in the private sector formal wages (as per the defence law(

FAQs

What shocks does the paper consider for Jordan’s 2020 COVID-19 impact?

It analyzes the combined effects of lockdown shocks and trade shocks on the economy and household welfare.

How does the paper estimate the impact of COVID-19?

It applies a Computable General Equilibrium (CGE) model for macroeconomic forecasts and a dynamic micro-simulation model to estimate household welfare outcomes, including poverty.

What do the results suggest about poverty in Jordan?

The crisis is projected to raise the poverty rate by about 11% and more than double the poverty gap, with informal workers and specific governorates facing the largest effects.

Jul 19, 2026

Upload by Quinn