WB foresees modest GDP growth this year

AMMAN — Jordan's real gross domestic product is expected to grow by 2.3 per cent in 2017, a tepid increase of 0.3 percentage points over the 2016 rate, according to the World Bank Economic Outlook for the country.

Services continued to be the principal driver of gross domestic product growth in 2017 propelled by a robust performance in tourism, which posted a double-digit growth in receipts and arrivals in the first half of the year, indicated Jordan's economic outlook report for 2017, which was e-mailed to The Jordan Times.

"The tourism sector has more than made up for the declines from Gulf Cooperation Council countries by attracting visitors from other parts of the world, especially Asia," the report read.

Jordan’s industrial sector is regaining momentum based on a recovery in mining and quarrying, which grew by 14.7 per cent in the first quarter of 2017 (Q1-2017) in contrast to a contraction of 8.4 per cent year on year in the first quarter of 2016. 

Because of these developments, and a resurgence in potash prices, net exports of goods and services are projected to lead GDP growth on the demand side, as they did in 2016, the report showed.

Amidst a challenging regional backdrop, Jordan’s economy remains “sluggish, though it is undergoing a modest pick-up in 2017, owing to a resurgence in tourism and mining and quarrying”.

Yet this is overlaid on continued uncertainty regarding the crises in Syria and Iraq, and the duration of the slowdown in the Gulf Cooperation Council (GCC) countries on the one hand, and the slow pace of structural reforms on the other.

In 2017, Jordan’s fiscal position is expected to improve as a result of the government’s fiscal consolidation efforts in line with the International Monetary Fund programme. 

However, the narrowing of fiscal imbalances is likely to materialise at a slower pace than initially anticipated by the programme due to weaker economic growth. 

The projected overall fiscal deficit, excluding (including) grants, will be largely unvaried from 2016 levels at 6 (3.3) per cent of GDP. 

On the external front, despite a larger energy import bill reflecting higher international oil prices, the large current account deficit is expected to narrow driven mainly by the growth in tourism.