Jordan » Introduction

Basic Economic Facts

GDP Composition by Sector

In 1992, Jordan's GDP grew by 16.1 percent, the highest in the Middle East and North Africa region. By 1993, the GDP had grown by 5.6 percent against a regional average of 4.8 percent. The steady growth rate in GDP continued in 1994, as Jordan experienced an economic growth of 8.5 percent against a regional average which declined to a low of 2 percent. In 1995, growth in the GDP continued, this time at a 5.9 percent rate.

Real GDP grew between 1992-1997 by seven percent. Investment to GDP increased substantially from 22 percent in 1989 to 33.1 percent in 1997. Moreover, inflation was reduced from 25.6 percent in 1989 to an average of 3.8 percent between 1992-1997.

Jordan has made dramatic progress in boosting exports and reducing imports. The Kingdom's trade deficit decreased by 14 percent in 1994 and by another 1.1 percent in 1995, as exports skyrocketed by 26.5 percent and imports grew by 9.6 percent during 1995. Between 1985 and 1995, Jordan's exports grew by 293 percent, while imports increased by only 141 percent. However, exports which grew steadily from 23.7 percent of the GDP in 1992 to 27.1 percent in 1996 declined to 26 percent of GDP in 1997 and are projected to fall further to 25.7 percent. Domestic exports, which grew in absolute numbers by 2.5 percent, are estimated to have grown by 1.0 percent during the period January-March 1998, with exports of miscellaneous manufactures declining by 2.1 percent.

Jordan is a small country with limited natural resources. Faced with high levels of poverty and unemployment, King Abdullah gives high priority to economic reform as an essential condition for sustained economic growth to deliver jobs and better living standards for a rapidly expanding population. The agenda includes wide-ranging public sector reform, privatization, and trade liberalization: on the trade front Jordan is party to the Agadir Agreement between four of the more reformist countries in the Middle East/North Africa.

By regional standards Jordan has made good progress with reform. Economic growth has begun to improve, though sustained progress is needed to alleviate social problems. Jordan stands to gain from an improving economic situation in Iraq.