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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Available data suggests economic growth was soft in the fourth quarter of last year, after accelerating slightly in the third quarter. Industrial production fell annually at a faster pace in Q4 compared to Q3, largely due to falling manufacturing output and despite greater mining and quarrying output. Moreover, government spending in nominal terms decreased in Q4 compared to the same period a year earlier. More positively, however, the unemployment rate reduced slightly in Q4 compared to the previous quarter and the merchandise trade deficit narrowed slightly in year-on-year terms. Turning to this year, the recent global outbreak of coronavirus could hamper the tourism sector in Q1. That said, falling oil prices should reduce both energy prices for Jordanian businesses and the national bill for imports, given that Jordan is heavily dependent on imports to meet its oil consumption needs.
Growth should accelerate slightly this year thanks to progress on the ease of doing business, particularly in terms of accessing credit and complying with tax laws. IMF-backed government reform efforts should further improve the business environment and help contain public debt. Key risks to the outlook include geopolitical instability and adverse effects of the coronavirus outbreak. Our panelists project GDP growth of 2.3% this year, which is unchanged from last month’s forecast, and 2.7% in 2021.
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