Jordan’s economy is expected to grow 3.9 per cent this year and 4.5 per cent in 2011, according to a World Bank report.
The Global Economic Prospects 2010 report said growth in the Kingdom’s gross domestic product (GDP) is likely to be driven by domestic demand with the help of fiscal and monetary stimulus measures, as external contributions decline.
Meanwhile, experts described the projected growth figures as positive, expecting real economic recovery to come during the second half of this year.
Economist Jawad Anani predicted that the first six months of 2010 would not be encouraging, saying GDP growth will be between 2 per cent and 2.5 per cent, reaching 4 per cent in the second half of the year.
“Last year, the country’s economy did not achieve real growth as it grew only 2.5 per cent, which is the minimum percentage required to maintain the average income per capita,” Anani told The Jordan Times, adding that the cost of living also went down in 2009.
The economist, who has previously held several ministerial posts, explained that values of properties and shares will rise as well as commodity prices, which will speed up recovery, but noted that the government has to take certain measures to stimulate some economic sectors.
Ali Tabbalat, a financial analyst, said recovery will be linked to trade activities and other external factors, including recovery in the economies of the Gulf countries.
“The World Bank figure is optimistic. I personally expected growth to be slower because Jordan’s economy should rebound six months after the Gulf economies recover,” Tabbalat elaborated, adding however that if the government works intensively to attract foreign investments, the growth forecast by the World Bank could be reached in the second half of this year.
Economist Yusuf Mansur said fast recovery was not likely during the first six months of 2010, but expected GDP growth to reach 4-5 per cent or even higher because local banks will start to ease conditions on credit facilities, particularly to real estate companies.
“Growth is also linked to an increase in international oil prices, which will reflect positively on the economies of Gulf countries and automatically on Jordan’s economy,” Mansur noted.
Anani echoed Mansur and Tabbalat in linking economic recovery in the Kingdom to a rebound in the Gulf.
“Seventy per cent of Jordan’s foreign currency income is from the Gulf region and recovery in these countries will increase local exports and investments inflows,” Anani stated, forecasting that the repercussions of the global economic crisis would fade gradually during the first half of this year.
The World Bank report indicated that in 2009, steep declines in external demand, particularly from European markets, had a negative effect on merchandise exports in Jordan and other countries in the region including Egypt, Lebanon, Morocco and Tunisia.
This factor, the report said, was compounded by falling tourism volumes, lower worker remittances, and declining foreign direct investment inflows, especially from the Gulf economies, which the World Bank attributed to falling oil revenues.
The report also noted that economic recovery in the Gulf countries would support a revival in the Jordanian economy, suggesting a resumption of export growth, a rebound in remittances and various service receipts, and improvement in business expectations, leading to a revival in capital spending.
Jordan Times