2015年-世界发展银行全球_Jordan_Economic_Monitor_Spring_2015___Persisting_Forward_Despite_Challenges_38页_2mb

Jordan Economic Monitor Summary - Spring 2015

Core Content

Jordan's economy showed a slow but steady recovery in 2014, driven by external shocks such as the Egyptian gas disruptions, Syrian and Iraqi conflicts, and security incidents. Despite these challenges, the real GDP growth rate increased by 30 basis points to 3.1 percent, the fourth consecutive year of growth, outperforming the MENA region.

Key Economic Developments

Output and Demand

• Growth Drivers:
  • Supply Side: Construction, wholesale and retail trade, and finance and insurance services led growth.
  • Demand Side: Narrowed trade deficit and increased public investment, especially from GCC grants, were major contributors.
• Sectoral Contributions:
  • Mining and quarrying contributed 0.4 pp to GDP growth in Q3 2014.
  • Construction and manufacturing also contributed positively.
  • Agriculture improved from a negative contribution in 2013 to a positive one in 2014.
  • Tourism saw a small positive contribution due to increased spending per tourist.

Labor and Employment

• Unemployment:
  • The rate decreased from 12.6% to 11.9% but was not due to increased employment.
  • Labor force participation rate dropped from 37.1% to 36.4%, the lowest since 2007.
• Regional and Demographic Disparities:
  • Maan and Tafiela had the highest unemployment rates at 15.4%.
  • Youth unemployment remained high at 36.1% for those aged 15-19 and 29.3% for those aged 20-24.
  • Women's unemployment increased to 20.7% and their labor participation rate fell to 12.6%.

Fiscal Policy

• Fiscal Deficit:
  • Improved from 11.4% of GDP in 2013 to 9.2% in 2014, excluding grants.
  • Grants increased from 2.7% to 4.9% of GDP, mainly from the US and GCC.
• 2015 Budget:
  • Consistent with the IMF SBA program, reflecting continued fiscal consolidation.
  • Revenue measures included tax exemptions cancellation and new income tax law.
  • Expenditure cuts targeted government purchases, capital spending, and military expenditures.

External Position

• Trade Balance:
  • Improved by 1.3% yoy in 2014 due to higher domestic exports.
  • Energy imports increased by 6.4% due to reduced Egyptian gas supplies.
• Current Account:
  • Narrowed from 10.3% to 7.1% of GDP.
  • Services account improved significantly, while secondary income balance worsened due to reduced public transfers.
• Foreign Reserves:
  • Increased to US$14.1 billion by end-2014, exceeding the IMF's reserve adequacy floor.

Monetary Policy and Finance

• Inflation:
  • Headline inflation dropped to 1.7% in December 2014, the lowest since 2009.
  • Core inflation decelerated to 5.1% yoy in December 2014.
  • By February 2015, headline inflation turned negative at -1.7% yoy.
• Monetary Policy:
  • CBJ maintained an expansionary stance, cutting interest rates.
  • The overnight deposit window rate was reduced by 100 bps to 1.75% on February 3, 2015.
  • The transmission mechanism was limited, with only a 14 bps average drop in commercial bank lending rates.
• Financial Indicators:
  • Nonperforming loans remained stable at 7.0% of total loans.
  • Provisions increased to 76.4% of classified loans.
  • Risk-weighed capital adequacy ratio declined to 17.4%.
  • ROE and ROA dropped, indicating lower profitability.
  • Liquidity ratio increased, showing improved financial stability.

Prospects

• Growth Outlook:
  • Forecasted at 3.5% for 2015 due to stronger private consumption and investment.
  • Lower oil prices and energy projects are expected to drive growth.
• Downside Risks:
  • Escalation of the Syrian and Iraqi crises.
  • Increase in oil prices.
• Debt-to-GDP Ratio:
  • Expected to decrease due to growth and fiscal consolidation.

Special Focus: Access to Finance in Jordan

• Challenges:
  • A downward trend in access to finance for Jordanian firms.
  • Regional and sectoral disparities in financial access.
  • Firms in the industrial and service sectors faced more significant barriers.
• Key Issues:
  • Collateral requirements and access to credit lines.
  • Gender inclusiveness and firm age were also factors.
• Reforms:
  • Ongoing structural reforms to improve access to finance.
  • Emphasis on improving financial sector efficiency and inclusiveness.

Conclusion

Jordan's economy demonstrated resilience despite external shocks, with continued fiscal consolidation and improved external balances. However, underlying structural issues in employment and access to finance remain. The Central Bank's monetary policy has been effective in reducing inflation, but its transmission mechanism is still limited. The outlook for 2015 is positive, but risks from regional instability and oil prices must be monitored closely.