Ammon News, Business

Jordan’s economy to see modest growth next year expanding by 3 per cent


[11/20/2017 6:01:31 AM]

AMMONNEWS - Jordan’s economy which has been straddled with mounting debt and the burden of caring for the influx of refugees from the conflict in neighbouring Syria since 2011, will see a moderate acceleration over the coming quarters, helped by a rise in exports and strengthening external demand. Fiscal consolidation in Jordan, however will weigh on household consumption, preventing a stronger economic recovery, BMI research, a unit of the Fitch group said in its latest research note. Overall, Jordan’s real GDP is forecast to grow at 3.0 per cent in 2018 and 3.2 per cent in 2019. The kingdom's economy is projected to expand by 2.4 this year. BMI’s projections are quite similar to the Washington-based International Monetary Fund, which estimates Jordan’s GDP will grow by 2.3 per cent this year after expanding 2 per cent in 2016. “We expect rising exports to drive stronger growth in Jordan over the coming quarters, boosted by increasing external demand and improving regional stability,” BMI said. “This expansion will only be gradual, however, as consumption remains sluggish amid the implementation of fiscal consolidation measures.” The IMF projects Jordanian current account deficit to the narrow this year after it grew to 12.6 per cent last year, reflecting the challenging regional conditions including the Syrian refugee crisis, which the country had to deal with for several years. However, the pressure on economy is expected to ease a little with its main exports including chemicals, textiles and agricultural products picking up over the coming quarters as demand from key markets rises. The kingdom is expected to benefit from gradually improving economic conditions across the Arabian Gulf region, which altogether accounted for 29 per cent of its total exports in 2016. It is also to likely see exports to Iraq increase, following the late-August reopening of the Turaibil-Karameh border crossing, which was shut in mid-2015 after the so-called Islamic State (IS) took over the Anbar province. Iraq was recipient of more than 18 per cent of the Jordanian exports in 20 13, prior to IS takeover, compared with only 7.6 per cent in 2016. In terms of services exports, BMI said it expects the economic uptick to be driven by inbound tourism. “Tourism revenues were up 12.7 per cent over the January-October 2017 period, and we expect growth in this segment to remain robust in 20 18, particularly as GCC arrivals and tourism-related spending picks up again,” BMI noted. The ongoing implementation of austerity measures, as stipulated under Jordan's three-year Extended Fund Facility (EFF) arrangement with the IMF, will continue to weigh on consumption and investment in Jordan over the coming quarters. The government is cutting back on some subsidies, limiting general sales tax and custom duty exemptions, and broadening the income tax base, which will affect households' ability to spend, according to BMI report “While we believe targets for limiting expansion in the public sector wage bill are likely to be missed, we note that the government's generally limited ability to create jobs over the years ahead means that unemployment will remain high,” BMI said. “The government accounts for between one- and two-thirds of jobs in the kingdom, and we do not expect the private sector to be able to absorb the rising number of entrants into the workforce.” BMI estimates unemployment to come in at 15.0 per cent of the total labour force in 2018, from a projected 15.3 per cent in 20 17. *The National

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Gov't endorses 2018 draft state budget, projects deficit at 1.8pct of GDP


[11/19/2017 3:28:13 PM]

AMMONNEWS - The Cabinet on Sunday endorsed a draft 2018 state budget law projecting public revenues at JOD8.496 billion and foreign grants at JOD700 million while post-grant deficit is forecast at JOD543 million or 1.8 per cent of estimated Gross Domestic Product (GDP) for 2018. In 2018, local revenues are projected to cover 86.2 percent of public spending and 98.9 percent of current expenditure, reflecting commitment to enhancing self-reliance as envisaged in the Royal Directives. According to the draft state budget, the gross value of public spending in 2018 is forecast at JOD9.039 billion, up by JOD572 million. The largest chunk of public spending will go to current expenditure at JOD7.886 billion, indicating an increase of 6 percent compared with 2017. The rise in current spending is driven by a normal growth in public servants' and pensioners' salaries, higher interest on public debt and the repayment of financial dues from previous years. Capital spending has been allocated JOD1.153 billion and the door will remain open to launching additional capital projects in partnership with the private sector. Operating expenses fell to JOD348 million compared with JOD376 million estimated for 2017 as a result of tightened spending and rationalization drive. Excluding foreign grants, fiscal deficit is projected at JOD1.243 billion or 4.1 per cent of GDP compared with JOD1.587 billion and JOD1.714 billion in 2017 and 2016 respectively. In the 2018 budget draft law, the amounts allocated to the social safety net surged to JOD788.8 million from JOD702.4 million estimated for 2017. The draft budget law for 2018 is in line with the national financial and structural reform program and incorporates the decentralization scheme through allocating capital budgets for the Kingdom's various governorates. The 2018 budget projects are based on rationalized public spending, tighter control on employment in the public sector and maintaining a halt in furniture and vehicle procurement for public agencies. Additionally, the draft budget is based on better tax collection, more robust fight against tax evasion and dodging, stiffer penalties against evaders and gradual cuts of sales tax, services and customs' exemptions. With regards to the 2018 draft budget of government units, gross revenues are projected at JOD1.664 billion while spending is expected at JOD1.812 billion, signaling a deficit of JOD148 million. Based on the above, the aggregate fiscal deficit (general budget and government units) is expected at JOD831 million or 2.8 percent of 2018 estimated budget against JOD1.035 billion or 3.6 percent of GDP in 2017.

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Jordan's tourism revenues reach $3.9 billion end of October


[11/15/2017 1:37:32 PM]

AMMONNEWS - Tourism revenues rose by 12.7 per cent during the first ten months of this year to around $3.9 billion, up from $2.4 billion generated during the same period in 2016, the Central Bank of Jordan said. In a statement issued on Wednesday, the CBJ attributed that to the rise in the number of tourists by 8.9 percent compared to the same period of last year. The Kingdom's revenues last month rose by 18.5 percent standing at $336.6 million due to the rise in the number of tourists by 12.3 percent compared the same period of last year.

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ASE starts trading on higher note


[11/15/2017 5:29:05 AM]

AMMONNEWS - The Amman Stock Exchange (ASE) opened trading on Wednesday with a rise to 2090 points compared to 2088 points of last session closure, according to market sources. The market index fluctuated between 2088 points and 2091 points in the first 15 minutes of today's session with a trading volume of JD1.1 million.

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IMF says does not recommend Jordan lift bread subsidies


[11/9/2017 5:41:12 AM]

AMMONNEWS - The International Monetary Fund said on Wednesday it does not recommend lifting bread subsidies in Jordan, which would place a burden on the poor. “The IMF does not recommend lifting bread subsidies,” the IMF said in a statement, adding that some media reports had misrepresented its position on the issue. “The design of policy measures must consider the impact on the Jordanian economy and on the poor,” it added. *Reuters

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Gov't approves electricity project with Saudi Arabia


[11/8/2017 1:53:06 PM]

AMMONNEWS - The cabinet decided Wednesday to approve a memorandum of understanding to implement an electricity interconnection project between Jordan and Saudi Arabia. In a meeting chaired by Prime Minister, Hani al-Mulki, the cabinet said the memorandum to be signed between the National Electric Power Company and the Saudi Electricity Company will enable both parties to prepare technical and economic feasibility studies for the project, which will strengthen electrical networks, exchange electricity, and enhance the stability and reliability of electrical transmission networks between the two countries. The cabinet also approved the 3rd amendment to the European Union Grant Agreement for the Promoting Financial Inclusion Program through developing governance and microfinance in Jordan. On the other hand, the government approved the recommendations of the ministerial group formed to oversee the annual and funding plans for public funds in the Kingdom. The cabinet has also endorsed several decisions and projects related to local affairs.

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Planning minister highlights importance of supporting Jordan


[11/8/2017 6:55:19 AM]

AMMONNEWS - Minister of Planning and International Cooperation Imad Fakhoury highlighted the importance of continuing support to Jordan to enable it to continue its services to the refugees as well as host communities. During a meeting on Wednesday with President and CEO of the International Rescue Committee, David Miliband, Fakhoury also reviewed the economic situation in Jordan, as well as economic and social challenges facing the Kingdom, mainly growth rate, indebtedness and poverty and unemployment. The minister also spoke about the humanitarian and financial burdens shouldered by Jordan as a result of hosting a large number of Syria refugees, who are placing an increasing pressure on the sectors of education, health, water among others. Fakhoury praised commitment of the International Rescue Committee to implement projects to support Syrian refugees as well as initiatives to support host communities of refugees that will contribute to creating job opportunities for the youth.

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