Jordan Economy

March 16, 2010Jordanby EconomyWatch Content

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An almost completely landlocked country, the Kingdom of Jordan is located in the Middle East. A large part of the country is covered by the Arabian Desert. Amman is the capital of Jordan.

Its neighboring countries are Israel, the West Bank, Syria, Iraq and Saudi Arabia. Over the years, Jordan has been witness to the rise and fall of various civilizations.

Although it is a constitutional monarchy, it is served by a representative government. The head of the state is the reigning ruler, King Abdullah II, who is also the chief executive and commander-in-chief of the armed forces.

With mostly urbanized citizens, Jordan is a modern Arab country, although it is relatively poor. Royal Jordanian Airlines is the national airline. Many foreign carriers also operate in Jordan, such as, Delta Airlines, Lufthansa, Egypt Air, BMI, Emirates, Turkish Airlines and Air France.

The population of Jordan is 6.117 million, of which 92% are Sunni Muslim, the rest being primarily Christian and Shia. Up to 57% of Jordanians are Palestinian in origin, and this has created social problems in the past, most notably the 'Black September' incident, and continues to cause tensions.

Moving to stay ahead of a range of uprisings across the arab world in early 2011, King Abdullah of Jordan sacked his entire cabinet, appointed a new Prime Minister and promised to move quickly on social reforms.

Jordan Economy: Profile

Jordan is a small country that has emerged as the "business capital of the Levant". The free market economy of Jordan has grown 7% annually since the accession of King Abdullah in 1999. It relies on foreign trade for its energy and natural resource requirements. Due to the implementation of liberal economic policies, the nation has become one of the most competitive Middle Eastern economy. Jordan boasts a modern and developed banking system and is attracting significant foreign investment. This has also enabled the country to smoothly tackle the global financial downturn of the late 2000s. Jordan shares healthy relations with the UK and the US, being a pro-Western regime.

Jordanian Economic Profile: Statistics

Jordan's GDP (Purchasing Power Parity) was $34.617 billion in 2010. That makes Jordan the 98th largest economy in the world, up from $33.175 billion in 2009.

2004 - 2008 were good years for Jordanians, with the economy registering consistent 8% and above growth rates. Although Jordan struggled during the financial crisis, it still managed to grow, at a 2.35% rate in 2009 and 3.4% in 2010. Growth is expected to be in the 4.0% - 5.5% range this year until 2015.

The benefits of this growth has not been equally felt. Jordan is one of the poorer countries in the world, ranking at 107th in terms of GDP Per Capita on a PPP basis. For 2010, that figure stood at $5,658.79. Although per capita income is growing, and is expected to reach $5,839 in 2011 and $6,996 by 2015, this grow is slower than overall GDP growth.

The reason is simple. Jordan is a young country with a high birth rate, so the population is growing faster than economic opportunities are. By 2011, the population would have increased to 6.258 million, 6.853 million by 2011.

The unemployment rate is rate is still high at 13%, but that is less than the 14% - 15% range that was seen in most of the 2000 - 2009 period. It is further expected to moderate to 12% - 12.5% in coming years.

14.2% of people are estimated to live below the poverty line.

Jordan eonjoyed many years of low inflation, helped by fuel subsidies, but by 2005 that had started to change. In 2008 inflation reached a shocking 13.944% on average, but in 2009 prices actually fell by -0.672% per cent.

Inflation came back in 2010, averaging 5.506%, and it is expected to average 5% in 2011 before dropping down to a manageable 2% - 4% range. Rising food prices and poor living conditions are major areas of complaint for many Jordanians.

 

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