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Jordan Economical Facts

 

Economical overview

Jordan's economy is heavily dependent on what is happening in the region. Over the years, wars, conflicts and riots in the immediate area, although not directly affected by Jordan, have had major repercussions in the form of reduced trade, tourism and investment, as well as large refugee flows.

Despite a lack of natural resources, water and agricultural land, Jordan has managed to achieve greater prosperity than many other states in the Middle East. This has largely been due to income from Jordanian migrant workers abroad (mainly in the oil-rich Gulf states) and exports of phosphate (the country's only raw material of importance).

  • Countryaah.com: Major imports by Jordan, covering a full list of top products imported by the country and trade value for each product category.

Jordan has also benefited from its position as a hub for trade between Europe and the Middle East as well as relatively well-trained labor. Not least, the expertise and capital of the Palestinians has contributed to economic development, especially the growth of the financial sector.

Tourism has been expanded in particular around the port city of Aqaba. Tourists are also attracted by desert landscapes such as Wadi Ram, the rocky city of Petra, Roman ruins and crusader castles.

  • Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including JOR which represents the country of Jordan.

Most important for the economy, however, has been international aid. Jordan's involvement in, among other things, the peace process between Israelis and Palestinians has contributed to the country being treated generously by creditors in the West.

Economical Facts of Jordan

The US attack on Iraq in 2003 stopped deliveries of cheap Iraqi oil to Jordan; they were later replaced by - more expensive - oil from the states of the Persian Gulf, mainly Saudi Arabia. Gas deliveries from Egypt have since the Arab Spring 2011 become both more uncertain and more expensive. An agreement on gas purchases from Israel, which began extracting natural gas in the Mediterranean, has been concluded and deliveries have been initiated, but the agreement is disputed.

The conflicts in Iraq in the 2010s and the war in Syria have caused huge refugee flows to Jordan, which despite international aid, harms the country's resources. As a result of a deal with the EU, Jordan grants 60,000 Syrian refugees work permits, but the number of refugees has counted over the million.

Despite steady economic development for several decades, and some growth in the economy even during the 2010s, Jordan is faced with problems such as a continuous budget deficit and a large and growing government debt. In 2018, central government debt amounted to just over 94 percent of GDP. (By comparison, the EU has stayed on the benchmark that member states should not have higher government debt than 60 percent of GDP, which several EU countries have found difficult to manage.)

The imbalance has been partially offset by the income from tourism and by the money that Jordanian guest workers send abroad, but with the global financial crisis of 2008 and the wars in the immediate area, these subsidies to the economy have shrunk. In order to reduce dependence on such revenue as well as on phosphate exports, the government is trying to develop sectors such as IT, the pharmaceutical industry and tourism. An ambitious 10-year development plan (the National Agenda) was launched in 2006, but economic reforms, including privatizations, have been difficult to implement.

Other problems are high unemployment (officially around 15 percent) and large gaps between poor and rich. In the wake of the Arab Spring of 2011, the government introduced a series of subsidies and support measures designed to improve living conditions for the poor but also for the middle class. At the same time, this meant that the budget deficit increased. Attempts to cut subsidies, which included fuel and food, among other things, led to demonstrations.

To cover the deficits, the 2012 IMF set up a three-year standby credit of just over two billion dollars. Within the framework of the agreement, among other things, a fairer and more efficient tax system and a new social insurance system have been introduced, which will give more money to the person who is connected to it (still only those who have / have had jobs can get part of it)).

The budget has been tightened and a review has been made of energy needs. The low oil prices meant that from 2015, they dared to raise electricity prices by up to 15 percent as part of the abolition of subsidies in the long term. In 2015, a new ten-year plan (Vision 2025) was adopted aimed at creating growth and combating poverty.

2020 began with an agreement on a new, four-year support package for Jordan from the IMF of $ 1.3 billion. Before disbursements started, there was a new problem, the corona pandemic, which is widely assumed to predict global recession.

Since 2002, the EU and Jordan have an association agreement, which has laid the foundation for free trade. Customs duties on most goods and a variety of services have been abolished. The idea is that the agreement will be developed with, inter alia, rules for investment protection.

The EU is (collectively) Jordan's largest trading partner, followed by the US, Saudi Arabia and China. One-sixth of Jordan's trade is with EU countries (2017). From the EU, Jordan mainly buys mechanical equipment. Exports to the EU include textiles.

A free trade agreement with the United States (the first between the United States and an Arab country) came into force in 2001 and tariffs on most goods and services were abolished until 2011.

Jordan has been a member of the World Trade Organization since 2000.

Most of Jordan's exports are shipped via Aqaba, which is Jordan's only port. Plans for a more modern freight railroad between Aqaba and the capital Amman have been around for a long time and have been actualized by China's major investments in "new silk roads" for international trade. Against this background, Jordan also hopes to expand its rail network to link neighboring countries (by extension China and Europe).

FACTS - FINANCE

GDP per person

US $ 4,248 (2018)

Total GDP

US $ 42,291 million (2018)

GDP growth

1.9 percent (2018)

Agriculture's share of GDP

5.6 percent (2018)

Manufacturing industry's share of GDP

19.0 percent (2018)

The service sector's share of GDP

61.8 percent (2018)

Inflation

2.0 percent (2019)

Government debt's share of GDP

94.4 percent (2018)

External debt

US $ 30,036 million (2017)

Currency

Jordanian dinar

Merchandise exports

US $ 7,773 million (2018)

Imports

US $ 17 969 million (2018)

Current account

- US $ 2,850 million (2018)

Commodity trade's share of GDP

66 percent (2018)

Main export goods

clothing, manure, pot ash, phosphate, vegetables, pharmaceuticals

Largest trading partner

United States, Iraq, India, Saudi Arabia, China

 

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