Economic Conditions

GDP:

The GDP of Jordan was growing at an average annual rate of 2.55%, between 2010 and 2016 [12]. The growth picked in 2014, reaching 3.1%, but then slowed down to 2% by 2016 [13]. The overall increase in the period amounted to 46.3% – from $26.4 billion to $38.6 billion [14]. The economic performance during the past seven years has been weaker than in the early- and mid-2000s , when the GDP growth rates were between 4.2% and 8.5% [15]. The conflict in the region has affected Jordan’s economy, by causing closure of export routes to Syria and Iraq, provoking a huge influx of refugees, and leading to a decline in tourism. Nevertheless, the GDP growth is projected to accelerate to 3% by 2019, as the government takes steps to stimulate the economy [16].

Balance of Trade:

Jordan has a negative external balance on goods and services. In 2016 it equalled -$8.05 billion [17]. The country’s imports of products grew continuously between 2010 and 2014, while exports remained stagnant throughout much of the period [18]. Due to disruption of trade with Iraq and Syria (which collectively take around 9% of Jordan’s exported goods), the exports of products remain below the 2011 level, as of 2016 [19]. The situation has been better with the exports of services, which, despite the deterioration of economic conditions, have shown some growth [20]. The external balance on goods and services is likely to stay below zero in the next 5-10 years. However, since 2013 it no longer follows a declining trend, leading to a slight improvement in Jordan’s balance of trade over the past couple of years [21].

Government Budget:

Jordan government budget showed a deficit of over 3.2% of GDP in 2016 [22]. The government had a deficit ever since 2005, and in 2009 it was as large as 8.9% of GDP. However, following fiscal consolidation efforts, the budget has improved, and the World Bank has announced some positive expectation with regards to the country’s fiscal position [23]. As Jordan continues to make adjustments in line with the International Monetary Fund program, fiscal imbalances are projected to narrow; yet, the pace of change is likely to be slow [24], suggesting that the deficit will remain close to 3% of GDP in the near future.

Currency:

Jordanian Dinar (JOD) is Jordanian national currency. The Jordanian central bank seeks to maintain a fixed exchange rate between JOD and USD, which is equal to 1.41 JOD/USD. Between 2011 and 2017, the exchange rate has fluctuated between 1.4045 and 1.4209 [25]. As of 18 December 2017, the exchange rate is 1.41044 [26].

Inflation:

In the fourth quarter of 2017, inflation rate in Jordan has been around 3.4%. Throughout 2016 and most of 2015, the inflation rate has been negative, as the country’s struggled with slowed economic activity and implemented tight monetary policies. The most recent growth in prices has been most noticeable for food, non-alcoholic beverages, restaurants, and hotels. Less substantial increases happened in the cost of housing, transport, furnishing, health, education, and communication [27]. With the recovery of the tourist sector, improvements in the overall economic situation, and a stable domestic demand, the level of inflation is likely to remain above 2% in the near future.

Foreign Direct Investment:

Jordan has historically been one of the major recipients of FDI in region. In the mid- and the late-2000s, the country benefited from large financial inflows from the Gulf countries [28]. Between 2002 and 2006, Jordan received a total of $7.25 billion in FDI [29]. At its peak, the inward FDI amounted to $3.5 billion (in 2006) [30]. Following the financial crisis of 2008, the incoming investment dropped, but remained above $1.5 billion for most of the time. In 2016, the FDI inflows amounted to $1.54 billion [31]. In order to boost inward FDI, the government of Jordan plans to launch a number of large infrastructure projects, some of which would aim at improving the country’s hospitality services and accommodation infrastructure, while others - its logistics and transport networks [32]. As far as FDI outflows are concerned, the value of Jordanian investment abroad has been insignificant, not exceeding 85 million per year, between 2008 and 2016 [33].   

Unemployment:

Jordan has a high unemployment rate of over 13.2% [34]. Although economic growth has been achieved, the pace of job creation lags behind the growth of labor force. Comparatively low rates of female employment despite improved educational attainment signify that women are provided few career opportunities as the conservative social norms put restrictions on the types of jobs that female workers can do. Large youth unemployment also persists, forcing many young workers to seek jobs in the informal sector. Additionally, immigration puts pressure on the Jordanian labor market as it is increasingly difficult for many refugees to stay in Jordan without doing any work. The Jordanian government seeks to reduce the unemployment rate by encouraging job creation in the private sector and achieving higher rates of economic growth. Creating better terms of employment in the private sector appears particularly important, since many jobs offered by private employers often do not meet the financial and social needs of workers