Jordan 

Jordan country policy

Policy established 02 February 2005

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 750 mln euro
• - of which was used as at 2010-07-31 0 mln euro

Country class: 5

Jordan country facts

Atradius Dutch State Business Economic Research 

Country Report last updated :  January 26th, 2010 
Country :  JORDAN 

Political Situation
Stable, But Islamic Outbursts Possible

Head of state
King Abdullah bin Hussein al-Hashemi since 1999, PM Samir Rifai since Dec 2009.

Form of government
Constitutional parliamentary democracy, parliamentary power heavily circumscribed. National assembly (110 members) is democratically elected, Senate (55 members) is appointed by King.

Internal Economic Situation
No 2009 Recession; Double Deficit

General situation
Without grants, fiscal deficit expected to be > 10% GDP in 2010. No recession in 2009 (3% real GDP growth, generated by private consumption). Inflation lowered to 0% in 2009 (2008 15% because of fuel/electricity subsidies were removed). Little change in 2010: again 3% growth (lead by priv. consumption), budget deficit 10% and 5% inflation (reversed currency and commodity trends compared to 2009). Total public debt stock 70% (high), financing (mainly) through domestic banks, private sector crowded out. Fixed peg JOD – USD not at stake. Slowdown in US affects exports. All bank deposits are guaranteed until end-2010. Rising portfolio NPL’s (>6% of total loans). Banking sector largest GDP contributor, vulnerable to downturn in asset / real estate prices (Dubai). High capital ratio, 5 banks dominate sector, further consolidation likely. Central Bank eased monetary policy (rates lowered 200 bp since Nov 2008, no more cuts expected), but commercial banks became more reluctant to lend and spread between commercial bank lending and official rate widened. Amman stock exchange lost 12% in 2009. Country has few natural resources, except for large phosphate reserves.

External economic situation
improved solvency; struct. Weak bop

Main sources of foreign exchange
Phosphates, textiles, tourism, transfers, agricultural goods.

Main foreign markets
USA (29%), Iraq (18%), India (7%), other Middle East states (26%).

Main expenses of foreign exchange
Imports of capital and semi-finished (manufactured) goods, fuels. Import dependent country.

Bal ance of payments 
CA deficit declines to 5% in 2010. FDI drying up as Arab and US investors reined spending in the wake of global credit crunch. USD 300 mln IBRD loan gives some relief. Remittance inflows (from Arab states) also under pressure.