Jordània flag Jordània: Visió econòmica i política

El context econòmic de Jordània

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Jordanian economy, severely impacted by the refugee influx and grown increasing dependence on international grants that followed the Syrian and subsequent refugee crisis, had to deal with the global effect of the COVID pandemic since 2020. Consequently, its GDP growth amounted to -1.6% in 2020, from +2% in 2019. Nevertheless, growth came back in 2021 with a 2% increase of the country GDP (IMF, October 2021). According to the updated IMF forecasts from October 2021, GDP growth is expected to remain at 2% this year and then to 3.1% in 2023, subject to the post-pandemic global economic recovery.

Jordan is one of the few countries in the Middle East that does not rely as much on its natural resources due to scarcity of hydrocarbon and water resources. Nevertheless, it is also one of the most committed countries to financial reforms within its region (privatisation, tax reforms, opening of the banking sector, etc.). Jordan has implemented reforms under the terms of the extended fund facility that it negotiated with the IMF in 2016 and the subsequent fiscal consolidation policies brought down the government budget balance to a deficit of 3.2% of GDP in 2019, 2.9% in 2020 and 2.4% in 2021, from 3.6% in 2018. This trend is expected to continue with government balance anticipated to fall to a deficit of 1.6% by 2022 but then -2.2% in 2023. The IMF estimates that public debt was 88% of GDP in 2020 and 90.9% in 2021 and will stabilise in 2022 (90.6%) and should reduce to 88.4% in 2023. At the same time, Jordan renewed its agreement with the IMF at the start of 2020 on a two-year arrangement under the extended fund facility for around USD 1.3 billion. Jordan adopted a comprehensive IMF-backed income tax law at the end of 2018, which provides for a gradual increase of corporate tax rates from 2019 to 2024. Industrial, pharmaceutical and clothing activities, that currently benefit from reduced tax rates, will be imposed at the same rate as the rest of businesses as of 2024. However, the effective corporate tax is even higher as Jordan introduced at the start of 2019 a new national contribution tax on the taxable income of all corporations in Jordan, at varying rates from 1% to 7%, as part of its efforts to pay off the national debt. While Jordan's macroeconomic dynamics are set to improve, global financing conditions and regional instability continue to challenge the economic growth, limiting the scope of foreign investment. Jordan's current account deficit, 8% of GDP in 2020, and 8.9% in 2021 is expected to narrow to 4.4% of GDP in 2022 and 3.2% in 2023. The country's external position remains fragile given considerable financing requirements. Inflation fell to 0.4% in 2020 from 0.7% a year earlier but increased to 1.6% in 2021 and is expected to pick up to 2% in 2022 and 2.5% in 2023 amid tight monetary policies and sluggish demand.

Modest economic growth, high unemployment and limited job creation raise concerns about the extent of poverty reduction that can be achieved. Despite low economic contraction in 2020, household recovery may be slow and uneven. Larger households, young, female, informal workers and those in interaction-intensive services sectors will likely see depressed incomes for longer (world Bank, 2022). In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic. In addition to the humanitarian and financial crisis caused by the influx of Syrian refugees, Jordan also has to deal with a high unemployment rate, that rose further to 22.7% by the end of 2020 (IMF, 2021), a high poverty rate and high levels of inequality. In the long-term, the Jordan Unemployment Rate is projected to trend around 24% in 2022 and 20% in 2023, according to the Trading Economics econometric models (Trading Economics, 2022). Unemployment affects university degree holders and women much more negatively, further contributing to inequalities. However, Jordan's development has benefited from international aid as the country has been able to become a central element of stability in the Near and Middle East, ensuring peace on the borders it shares with its neighbouring countries.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 44.5743.76e45.3447.5050.20
GDP (Constant Prices, Annual % Change) 2.0e-1.6e2.02.73.1
GDP per Capita (USD) 4,426e4,2864,3944,5654,793
General Government Balance (in % of GDP) -3.2-2.9-2.4-1.6-2.2
General Government Gross Debt (in % of GDP) 78.088.0e90.990.688.4
Inflation Rate (%) 0.70.41.62.02.5
Unemployment Rate (% of the Labour Force) 19.122.70.00.00.0
Current Account (billions USD) -0.95-3.49e-4.05-2.11-1.62
Current Account (in % of GDP) -2.1-8.0e-8.9-4.4-3.2

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture represented 5.2% of the GDP and employed 2.5% of the workforce in 2021 (World Bank, 2022). The lack of water creates an obstacle to agricultural development. The principal crops are wheat, barley, lentil, tomato, cucumbers, eggplant, citrus fruits, olives, strawberries and grapes. Phosphates and potassium are the only natural resources of the country. Six uranium deposits, accounting for 3% of the world's reserves, were discovered in recent years and the country has signed around 20 international agreements in the field of atomic energy.

Industry contributed 23.9% of the GDP and employed around 24.5% of the workforce in 2021 (World Bank, 2022). Mining and quarrying (mainly phosphate and potash) are among the major industries. The manufacturing sector is rather limited and dominated by textiles, a sector presently in a state of crisis due to international competition.

The services sector, which employed 73.1% of the workforce, contributed 61.6% of the GDP in 2022 (World Bank,2022). Communication technologies and financial services are particularly active in the country. The sectors of distribution and tourism infrastructure also contribute substantially to GDP, although they experienced a slowdown in recent years. The construction and transport sectors are constantly expanding.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.5 24.5 73.1
Value Added (in % of GDP) 5.2 23.9 61.6
Value Added (Annual % Change) 1.6 -2.4 -1.0

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
64,6/100
World Rank:
69
Regional Rank:
6

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.33/10
World Rank:
65/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

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Sources of General Economic Information

Ministries
Ministry of Economy, Industry and trade
Ministry of Finance
Statistical Office
Department of Statistics
Central Bank
Central Bank of Jordan
Stock Exchange
Amman Stock Exchange
Economic Portals
 

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Actualitzacions: April 2022

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