The Hashemite Kingdom of Jordan
Federation of Euro-Asian Stock Exchanges
Jordan is an almost landlocked country with a population of 9.9 million in 2018, increasing from 5.1 million from 2000,[at an annual growth rate of 5.3%. Jordan is highly urbanized with more than 91% of its population living in urban areas in 2018. With a constant fertility rate of 3.3 births and increasing life expectancy reaching 74 years in 2015,the country’s population below 24 years of age has been shrinking, reaching 55.2% in 2015.
According to the latest human development report in 2018, 1.3% of the Jordanian population was multi-dimensionally poor, while an additional of 1.0% lived near multidimensional poverty.
Jordan is an upper-income-country with a GDP (Purchasing Power Parity, constant 2011 prices) of Int$ 80.8 billion and a GNI per capita (Purchasing Power Parity) of Int$ 9,110 in 2017.Contributing around 17.6% to Jordan’s GDP, the finance, insurance, real estate and business services were the main drivers of growth in the economy in 2015.
The GDP growth rate averaged 2.5% in 2018. Due to declines in fuel and transportation prices, inflation went down to -0.9% in 2015 but ascended to 1.5% in 2018. At the fiscal level, the cash deficit narrowed from 5.3% of GDP in 2015 to 0.4% of GDP in 2018.[6] Notably, foreign grants, as a percentage of total revenues, went up from 12.5% in 2013 to 20.5% in 2014.[7] Jordan remains burdened with its public debt, which increased from 55.1% of GDP in 2008 to a high of 86.8% of GDP in 2018.
Over the last two decades, external trade’s magnitude in the Jordanian economy has been relatively stable, with international trade to GDP ratio scoring 92.6%.
Unemployment rate registered 18.5% in 2017, 13.3% for men and 24.1% for women, of which 48.3% of the unemployed belonged to the age group 15-24 years in 2015 and 41.1% for the age group 25-39 years.
The foreign currency reserves at the Central Bank of Jordan (CBJ) reached JD8687.0 million at the end of 2017.
The total public revenues and external grants increased by 2.6% at the end of November 2017. Total public spending by the end of November 2017 marked an increase of 3.8%. Hence, fiscal deficit after external grants amounted to JD910.0 million by the end of November 2017.
The Central Government net outstanding public debt reached JD25752.0 million by the end of November 2017. The net outstanding domestic debt reached JD14298.6 million by the end of 2017. The outstanding external public debt reached JD11471 million by the end of November 2017.
The Jordanian exports (national exports and re-exports) decreased by 2.6%, and Imports increased by 5.6% at the end of November 2017; as a result, the deficit in the balance of trade increased by 10.9%.
Economic Development and Outlook
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Real GDP is in its third year of 2 percent growth. On the supply side, services are expected to continue to buoy the economy, as tourism maintains a robust recovery—tourist receipts have already increased by 14.9 percent during the first half of 2018 (H1-2018). However, decline in issuance of construction permits which bodes poorly for private investment, and expected weak consumption (public consumption is weighed down by ongoing fiscal consolidation, and private consumption is weighed down by sluggish job growth) comprise the immediate downside risks.
Strong net export and investment performance will be needed for the remainder of the year, with the latter potentially coming from increased confidence given the change in government over the summer.
Jordan’s growth outlook is strained by the precarious regional situation, the current account deficit, and a lack of fiscal space.
Economic recovery depends on reducing debt levels and implementing structural reforms on the one hand and identifying sources to expand outward-oriented investment on the other, while taking advantage of international assistance and potential regional recovery. As such, we expect only moderate growth over the medium term, with GDP rising from 2.0 percent in 2017 to 2.1 percent in 2018, 2.3 percent in 2019 and 2.4 percent in 2020.
The drivers are expected to be by services from the supply side and net exports from the demand side.
Click here to read the full economic outlook by the World Bank for October 2018.