Jordan

Capital: Amman

Local time:
It is %T:%M %A in Amman

GDP growth rate: 3.5% in 2013

FDI stock: 20 406 million USD in 2010

Economic trends

Jordan is a small emerging economy with a GDP of less than EUR 20 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 represents less than 20% of GDP. 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. The growth rate was 2.5% for 2011. Poverty, unemployment (about 13.4% in 2011) and a large foreign debt 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.

The country has a relatively large budget deficit, 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 (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 turists visiting the country (an important economic factor) but also the consequences of the Syrian crisis which strongly disturbed the border economy in the north of the country.

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 branches of industry

Agriculture represents about 4% of the GDP and employs less than 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. It should be noted that 6 uranium deposits, representing 3% of the planet’s reserves, have been identified but to this day remain non-exploited. The manufacturing sector is rather limited and dominated by textiles, a sector presently in a state of crisis due to international competition.

Industry (mostly pharmaceutical) and mining together contribute to nearly 30% to GDP and concentrate one fifth of the workforce. The country is also rich in uranium deposits, still unexploited, which represent 3% of world's reserves.

The services sector, which employs more than 77% of the workforce, contributes two thirds to GDP. 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.

International trade

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 three export partners are the United States, Iraq, India and the UAE. The main export commodities are clothes & clothing accessories, fertilizers, pharmaceutical products and edible vegetables. Jordan is also one of the top five exporters of phosphates (together with the USA, China, Russia and Morocco).

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