FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
AMMAN STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Economic and Political Environment
King Abdullah II upon ascending to the
throne following his father's death in 1999,
has provided re-energized economic
leadership. King Abdullah, II bin Al-Hussein
has proven to be a steadfast proponent of
an invigorated program of economic reforms
that includes privatization, structural and
procedural changes that attract foreign
investment and enable foreign debt
restructuring and reduction. He also believes
that efforts should be continued to build a
modern Jordan that provides its men and
women with opportunities for a decent life
and ensures that the gains of development
are distributed equally among the people.
King Abdullah belongs to a new generation
of Western-educated Arab leaders. The
king's political agenda has been focused on
economic revival, greater political openness,
social justice and equality, in order to clearly
place Jordan actively on the regional and
international map. While keeping the warm
ties with the West nurtured by his father, he
has succeeded in improving ties with Syria
and the Palestinians and cementing links
with Saudi Arabia and Kuwait.
Economic Performance
The real GDP growth by end of 2005 was
7.2% compared to 7.7% for 2004. The pickup
was due to a huge jump in exports as
external demand grew, especially from the
United States. By the end of the year 2005,
exports grew by 10.3% to reach U$ 4.3
billion. Jordan conducts its monetary
policy with a fixed peg to the U.S. dollar
and believes that its trade performance
indicates that policy still provides for good
international competitiveness of its exports.
In the past few years, it has also resulted in
virtual stability in the price level with inflation
as measured by both the GDP deflator and
the CPI. Meanwhile, CPI inflation at the end
of June of 2006 was 6.2%, compared with
3.5% in 2005. As for the fiscal policy
performance, re-estimated figures indicate
an increase of 19.3% in domestic revenues
in 2005 as compared to the 2004, and a rise
of 11.3% in public expenditure, putting the
fiscal deficit at 5.2% of the GDP.
Foreign direct investment (FDI) has been
increased steadily in recent years. By the
end of March 2006, it reached US$ 1,201
million compared to US$ 383 million for
the same period in 2005. Jordan's gross
international reserves have been rising
steadily over the past several years, and at
the of June 2006, these reserves stood at
more than US$ 4.9 billion, equivalent to the
value of seven months' merchandise imports.
Privatization has moved along quite well.
The centerpiece of the program was the sale
of a large minority ownership (along with
management control) in Jordan Telecom to
France Telecom. Recently, the government
sold its stake in Jordan Telecom to some
institutional investors and offered 2.5% of the
company’s shares through an IPO. Also the
government sold 37% of its stake in the
Jordan Phosphate Mines and sold 80%
of the Royal Jordanian Investment. Many
projects are in the pipeline such as Jordan
Post Company, Jordan Mills Company,
and Jordan Agricultural Marketing and
Processing Company. Furthermore, many
privatization actions are taking place in the
field of aviation, power, transportation, and
mining.*
Jordan's main export commodities are
phosphates, fertilizers, potash, agricultural
products and textiles. Its main imports
include crude oil, machinery, transport
equipment, food, live animals and
manufactured goods. By end of June 2006,
exports (exports and re-exports) grew by
11.5%, and imports increased by 13.5%.
* Amman Stock Exchange.
Key Information Contacts
Jordan Securities Commission www.jsc.gov.jo
Securities Depository Center www.sdc.com.jo
Jordan Investment Board www.jordaninvestment.com
Arab Monetary Fund www.amf.org.ae
Ministry of Finance www.mof.gov.jo
Central Bank of Jordan (CBJ) www.cbj.gov.jo
National Information Center www.nic.gov.jo
ECONOMIC RATIOS
GROWTH OF INVESTMENT AND GDP
(%)
Jordan
Lower-middle-income group
GDI
GDP
10
Trade
5
0
Domestic
savings
Investment
-5
-10
Indebtedness
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