Jordan's Economic Background
His Majesty King Abdullah II has pushed for a broad program of economic and legislative reform, including privatization, in order to modernize the Jordanian economy. His Majesty also initiated reforms in the public sector as well as in the judiciary. The King promotes a public-private partnership involving the government, the private sector and civil society in order to draw up long-term policies of economic and social reform.
Over the last decade, Jordan has embarked on a wide-ranging economic reform agenda, with the objective of building a modern state based on economic vitality with substantial potential for growth and prosperity, among other goals. At the core of Jordan’s long-term development agenda is the transformation of the country from a lower-middle income economy into a modern knowledge-based economy with increased productivity and employment.
Jordan has made a number of achievements in various areas over the last decade. Some of Jordan’s recent accomplishments that have impacted positively on its economic reform agenda include education reforms, enhanced growth rates, an improved climate for investment, enhanced water management resources and improved healthcare services. Jordan has strengthened its private sector and expanded new sectors through free trade agreements with several nations.
Jordan’s Economic Outlook
Despite a number of improvements to its economic sector, Jordan continues to face a number of critical challenges. The most significant of these is its high budget deficit. At the beginning of 2010, Jordan faced the highest budget deficit in two decades. Other challenges include debt, poverty, unemployment, inflation, and regional instability. Nonetheless, Jordan has expressed its commitment to pushing ahead with its economic reform, modernization and development process.
In terms of economic reform, some of Jordan’s priorities include enhancing its business and investment environment, enabling and increasing the efficiency of Jordanians through the provision of necessary skills to enter the labor market, and stimulating economic growth by carrying out various infrastructure projects. Jordan’s Executive Development Program for 2011-2013 reflects the objectives of the National Agenda to stimulate economic growth, increase the welfare of Jordanians by reducing poverty and creating jobs, boost investments and enhance exports, lower inflation, budget deficit and public debt, and develop water resources and alternative energy resources.
Main Economic Indicators
Figures 2006 – 2009, in JD Million:
| 2006 | 2007 | 2008 | 2009 | |
| Population (In Million) | 5.600 | 5.723 | 5.850 | 5.980 |
| Unemployment Rate (%) | 14.0 | 13.1 | 12.7 | 12.9 |
| Gross National Product (GNP) at Current Market Prices | 10,699.8 | 12,541.4 | 15,549.6 | 16,699.7 |
| Gross Domestic Product (GDP) at Current Market Prices | 10,378.6 | 12,056.8 | 15,056.0 | 16,266.2 |
| Growth Rate of GDP at Constant Market Prices (%) | 8.1 | 8.8 | 7.8 | 2.8 |
| Total Revenues and Grants | 3,469.0 | 3,971.5 | 5,093.7 | 4,526.2 |
Source: Central Bank of Jordan
Quick Facts
Economic System – Market Economy.
Main Exports – Garments and textiles, pharmaceutical products, jewelry items, electrical appliances, machinery and equipment, furniture, chemicals and allied products, minerals, plastic products.
Main Imports – Crude Oil, textiles and garments, transport equipment, machinery and vegetable products.
Source: Jordan Investment Board
Summary of Fiscal Developments during the First Nine Months of 2010
Total Revenues and Grants
Total revenues and grants amounted to JD 3450.8 million during the first nine months of 2010 compared to JD 3251.7 million during the same period of 2009, reflecting an increase by JD 199.1 million or 6.1%. Foreign grants amounted to JD 278.6 million during the first nine months of 2010.
Budget Deficit
Jordan’s fiscal developments resulted in a budget deficit of JD 568.5 million during the first nine months of 2010 compared to a deficit of JD 865.2 million during the same period of last year. Excluding foreign grants, the budget deficit amounted to JD 847.1 million compared to a deficit of JD 967.9 million during the same period of 2009.
Total Debt
Jordan’s net outstanding public debt (domestic and external) increased at the end of September 2010 compared to its level at the end of 2009 by JD 1092 million or 11.3% to reach JD 10752 million or 55.4% of re-estimated GDP for 2010, compared to JD 9660 million or 54.2% of GDP for 2009, reflecting a rise by 1.2 percentage points.
Source: Ministry of Finance