Jordon Economic Forecast

The country of Jordon faces a number of economic challenges. It is surrounded by volatile situations in Iraq, Israel/ Palestine and Lebanon, and with an estimated 57% Palestinian population and unrest at the start of 2011, its own internal issues.

Since it has only limited gas and no oil, coal or other energy resources, it needs to spend a lot of its national income on energy. Being mostly desert, it also lacks good agricultural land.

The country of Jordon faces a number of economic challenges. It is surrounded by volatile situations in Iraq, Israel/ Palestine and Lebanon, and with an estimated 57% Palestinian population and unrest at the start of 2011, its own internal issues.

Since it has only limited gas and no oil, coal or other energy resources, it needs to spend a lot of its national income on energy. Being mostly desert, it also lacks good agricultural land.

As a result of both energy and food shortfalls, and thanks to its influx of Palestinians and a high birth rate, Jordan is a poor country with a high unemployment rate.

Since 1999, however, King Abdullah II has focused a lot of attention on improving the economy, in particular with market liberalisation measures, joining many free trade schemes, and building the knowledge-based and service-oriented sectors of the economy, particularly in IT and Telecoms.

In addition, Jordon completed the most recent International Monetary Fund program and is now following the guidelines to improve the country’s monetary policy, continue with privatization, and keep making strides for trade of imports and exports.

From 2006 to 2008, privatization proceeds helped lower public debt to Gross Domestic Product ratio, improving productivity that has made Jordon more attractive for Foreign Direct Investment.

Additionally, to control the country’s budget, Jordon’s government has stopped oil and gas subsidy levels, leading to a short-term burst of inflation which now seems to be under control, as well as other favorable for manufacturing and consumer use. Although some slowing has been experienced in Jordon’s tourism and transportation sectors, the country’s financial institutions and conservative banks have been able to get through the global financial crisis virtually unscathed.

Jordon GDP Forecast

Since the King took throne in 1999, the Jordon GDP (Gross Domestic Product, Current Prices, US Dollar) has grown every year. GDP on a PPP basis increased 8%+ for much of the last decade.

In addition, Jordon is now a highly competitive Middle Eastern economy because of liberal economic policies being implemented.

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. Jordan’s economy is forecasted to grow to $36.54 in 2011 and reach $47.944 billion by 2015.

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.

Jordon Unemployment Forecast

Reported numbers for 2010 show the Jordon population at approximately 6.177 million, and growing to 6.583 million by 2015 thanks to a high birthrate.

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 forecasted to moderate to 12% – 12.5% in coming years.

14.2% of people are estimated to live below the poverty line, although this is expected to improve somewhat. Per Capita Income is expected to improve, but not at the same rate as overall economic growth.

Jordon Inflation Rate Forecast

The Jordon inflation rate averaged 5.506% in 2011, and it is forecast to average 5% in 2011 before dropping down to a manageable 2% – 4% range. Inflation is primarily being driven by rising food, energy and other commodity prices.

Jordan enjoyed many years of low inflation in the previous decade, but when economically unfeasible fuel subsidies were abolished, inflation experienced both high growth and wild swings.

Jordon Current Account Balance Forecast

For the Jordon current account balance forecast, we look at all trade balances including goods, services, current transfers, and income.

In 2010, the current account balance was -$1.946 billion. This is forecast to grow by 29.6% in 2011 to reach -$2.55 billion, and to continue growing to $3.077 billion by 2015.

Since it has to import most of its food and energy, this imbalance is unavoidable in the short-term.

Medium to longer term, Jordan needs to build its higher Economic Value Added industries, such as IT and Telecoms, and to export more of these services, in order to bring its current account into balance.

Jordan’s current Gross National Debt is at a manageable 62.6% of GDP, and this figure is expected to reduce to 56.178% by 2015.