The Jordanian economy has been witnessing a continuous stable growth. However, current tensions in the Middle East are a major factor in determining future outlook
■ Gross Domestic Products (“GDP”) saw its biggest growth spurt in 2005 as a result of Iraqis fleeing to Jordan and investing in the country. However by 2008, the global financial turmoil had a tremendous impact in the growth of the economy, due to a slowdown in FDI and overall global activity
■ Real GDP growth was also low in the past 5 years recording a Compounded Annual Growth (“CAGR”) of 2.7%. The stunted growth in the economy was mainly a result of the Arab spring that has created much civil unrest across the Middle East and North Africa
■ Going forward, Business Monitor International (“BMI”) forecast Real GDP to grow from JOD 21.5 Bn (“Billion”) in 2015 to JOD 27.0 Bn in 2020 at a CAGR of 4.7%
■ The expected modest growth is highly connected to the following aspects:
– The ongoing Syrian conflict; The inflow of refugees has been challenging to the economy, however stability in Syria has a big factor to contribute to prosperity in Jordan
– The threat of extremist terrorist groups could hinder FDI inflows and lower number of tourist
– Jordan has limited natural resources, with the exception of potash and potassium; thereby hindering its ability to have self sustainable growth
– The increasing amount of domestic and international government debt have been creating a constrain for the government to play a role in the development of the economy
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