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flag Jordan Jordan: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Jordan is a small emerging economy with a GDP of less than EUR 24 billion, driven by the financial services sector -the first Arab bank is a Jordanian bank- but also by tourism, trade and real estate. The manufacturing sector represented less than 30% of GDP in 2013. The Jordanian economy has been largely liberalized and privatized in the 2000s, a period of strong growth.

With few natural resources (lack of oil, water scarcity), among the countries of this region Jordan is one of the most committed to reforms (privatization, tax reforms, opening the banking sector ...). The three main natural resources of the country are phosphates, potash and lime. Recent economic reforms aimed at liberalizing trade and attracting investments allowed Jordan to show good performance. In 2013, the growth rate reached 3.3% (after 2.8% in 2012). Poverty, unemployment (more than 14% in 2013), a large foreign debt and a large public debt (79% of GDP in 2012 then 84% in 2013) are the main problems of the country. Jordan's economy remains vulnerable to external shocks and regional unrest. It is also very dependent on foreign aid (IMF loan of USD 2 billion over 3 years in 2012).

The country has a relatively large budget deficit (9.1% of the GDP in 2013) due especially to the increase in subsidies for food and energy products, associated with the drop in international aid.

Jordan was very little affected by the financial crisis and the country has experienced a moderate economic slowdown in the last two years, mostly due to the decrease in money transfers from the immigrant workforce in the countries of the Gulf, which represent on average 3 billion USD annually (more than 15% of the GDP). Its economic outlook is rather worrying, notably due to the short-term impact of the "Arab spring", which reduced the number of tourists visiting the country (an important economic factor) but more importantly due to the consequences of the Syrian crisis which strongly disturbed the border economy in the north of the country: the country's structural economic crisis is worsened by a humanitarian and financial crisis of unprecedented scale.

In 2014, however, Jordan's development receives the attention -especially financial- of both large Western countries and monarchies of the Gulf, since the country was able to become a central element of stability in the Near and Middle East, ensuring peace on the borders it shares namely with Saudi Arabia, Iraq and Israel.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 28.8830.9833.86e36.5539.34
GDP (Constant Prices, Annual % Change) 2.62.72.93.5e4.0
GDP per Capita (USD) 4,6184,843e5e5,460e5,745
General Government Balance (in % of GDP) -6.8-6.2-5.1e-4.1-3.3
General Government Gross Debt (in % of GDP) 70.780.285.8e90.091.1
Inflation Rate (%) 4.44.65.6e3.02.6
Unemployment Rate (% of the Labor Force) 12.912.212.212.212.2
Current Account (billions USD) -3.48-4.77-3.30e-3.65e-2.73
Current Account (in % of GDP) -12.0-15.4e-9.8e-10.0e-6.9

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture represents 3.2% of the GDP and employs less than 1.3% of the workforce. The lack of water creates an obstacle to agricultural development. The principal crops are wheat, barley, lentils, tomatoes, eggplants, citrus fruits, olives and grapes. Phosphates and potassium are the only natural resources of the country.

Industry (mostly pharmaceutical) and mining together contribute to 29.9% to GDP and concentrate 17.9% of the workforce. The manufacturing sector is rather limited and dominated by textiles, a sector presently in a state of crisis due to international competition. The country is also rich in uranium deposits, still unexploited, which represent 3% of world's reserves.

The services sector, which employs more than 80.7% of the workforce, has contributed 67% of the GDP in 2013. Jordan is particularly active in the fields of communication technologies and financial services. The sectors of distribution and tourism infrastructures also contribute substantially to GDP, although they experienced a slowdown in the recent years. The construction and transport sectors are in full boom. The government encourages the new information technology and tourism sectors.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.0 17.5 80.5
Value Added (in % of GDP) 3.4 29.7 66.9
Value Added (Annual % Change) -3.5 2.3 3.3

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Jordanian Dinar (JOD) - Average Annual Exchange Rate For 1 USD 0.710.710.710.710.71

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Jordan on Globaltrade.net, the Directory for International Trade Service Providers.

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, labor 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:
69.2/100
Position:
Moderately Free
World Rank:
39/178
Regional Rank:
4/15

Distribution of Economic freedom in the world
Source: 2014 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:
6.13
World Rank:
55/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Jordan is very open to international trade. The share of foreign trade in the country's GDP is around 135%. However, its trade balance is in deficit, due to its dependence on raw materials. Jordan is a member of the WTO and signed a free-trade agreement (FTA) with the USA in December 2001, removing customs duties on the majority of goods and services until 2010. Jordan has also signed an Agreement of Association with the EU. In June 2010, Jordan signed an accord with Turkey, Syria and Lebanon, in order to create a free-trade zone, with free circulation of goods and workforce between these four near-eastern countries.

The country’s top export partners in 2013 were the United States, Iraq, India, Saudia Arabia and the Lebanon. The main export commodities are fertilizers, pharmaceutical products (75% of the national production is exported), clothes & clothing accessories, and edible vegetables. Jordan is also one of the top five exporters of phosphates (together with the USA, China, Russia and Morocco).

The top import partners are Saudi Arabia, China, the United States, Italy and Germany. Jordan mainly imports mineral fuels & oils, vehicles, machinery, and electric & electronic equipment.

The EU was the second trade partner of Jordan after Saudia Arabia in 2013.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 14,23615,56418,93020,75221,864
Exports of Goods (million USD) 6,3757,0288,0067,8857,911
Imports of Services (million USD) 3,6574,3124,3574,4654,441
Exports of Services (million USD) 4,1925,2214,7385,3795,159
Imports of Goods and Services (Annual % Change) -6.3-3.4-3.56.32.1
Exports of Goods and Services (Annual % Change) -3.725.4-1.1-2.53.3
Imports of Goods and Services (in % of GDP) 69.169.073.974.371.3
Exports of Goods and Services (in % of GDP) 45.948.247.746.242.5
Trade Balance (million USD) -6,266-6,794-8,819-10,544-11,470
Trade Balance (Including Service) (million USD) -5,398-5,490-7,557-8,668-9,687
Foreign Trade (in % of GDP) 115.0117.3121.5120.5113.8

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Iraq 17.5%
United States 15.2%
Saudi Arabia 12.2%
India 6.1%
United Arab Emirates 4.0%
See More Countries 44.9%
Main Suppliers
(% of Imports)
2013
Saudi Arabia 18.7%
China 10.4%
United States 6.3%
India 5.1%
Italy 4.8%
See More Countries 54.7%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Special garments for professional, sporting or...Special garments for professional, sporting or other purposes, n.e.s., knitted or crocheted 11.4%
Mineral or chemical potassic fertilizers (excl....Mineral or chemical potassic fertilizers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 7.6%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 5.7%
Natural calcium phosphates and natural aluminium...Natural calcium phosphates and natural aluminium calcium phosphates, natural and phosphatic chalk 4.8%
Tomatoes, fresh or chilledTomatoes, fresh or chilled 4.0%
See More Products 66.5%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 12.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 10.6%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.4%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 2.4%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 2.2%
See More Products 69.2%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

Source: Comtrade, Last Available Data

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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
Search Engines
Baladna
Google Jordan
Jordan Yahoo directory
Economic Portals

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Political Outline

Executive Power
The head of state is the King. The monarchy is hereditary. The King enjoys the executive powers. The King signs and executes all laws. He appoints and may dismiss all judges by decree, approves amendments to the constitution, declares war. The King appoints the Prime Minister as head of the government, having no fixed term of office. The cabinet, led by the Prime Minister, is appointed by the King.
Legislative Power
The legislature is bicameral in Jordan. Its parliament consists of: the House of Notables (the upper house) having 55 members who are appointed by the King to serve four-year terms; and the House of Representatives (the lower house) having 110 members elected by popular vote on the basis of proportional representation to serve four-year terms. The King’s power of veto may be overridden by a two-thirds vote of both houses of the National Assembly .The people of Jordan have limited political rights. The first parliamentary elections in 22 years were held in November 1989.
Main Political Parties
Political parties were not legalized in the country until 1992. There is no clear picture of the political parties in Jordan. There is practically only one party, called the Islamic Action Front, which plays the real role of an opposition party.
Current Political Leaders
King: ABDALLAH II (since February 1999) – hereditary
Prime Minister: Abdullah NSOUR (since 11 October 2012) - Independent
Next Election Dates
Chamber of Deputies: January 2017
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
141/180
Evolution:
7 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
6/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014