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Country Report Jordan

Publication Date June 2008
Publisher EIU
Product Type Report
Pages 22
ISBN Number not applicable
Product Code EIU00010
Price

£155.00
approximately: $274 | €197

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Summary

Outlook for 2008-09

  • The king, Abdullah II, is likely to remain in power, supported by the loyal and effective armed forces.
  • The opposition Islamic Action Front (IAF) is set to become more confrontational, with hawks within the party increasingly in the ascendancy. However, its influence will be weakened by continued in-fighting.
  • The king will continue to pursue an active diplomatic approach to resolving the region's unstable political scene, but his influence will remain limited, and his pro-Western orientation is unpopular with the population at large.
  • The government will continue to pursue economic liberalisation, but, mindful of any potential public backlash, progress will be relatively slow.
  • The fiscal deficit will widen in 2008-09, and the government will remain heavily dependent on foreign official grants.
  • We have revised our inflation forecast upwards, after raising our projections for global prices for both oil and food. We now expect average consumer price inflation to reach 13.6% in 2008, before falling to 5% in 2009.
  • Jordan's current-account outlook has worsened, after we raised our import spending projections in line with our higher oil price forecast. We now forecast that the current account will return a deficit of 23% of GDP in 2008-09.

Monthly review

  • Jordan has marked the 60th anniversary of Israel's creation with opposition protests and arguments over the public assembly law.
  • King Abdullah has presented a largely upbeat picture of the country's economic situation in a speech to mark Independence Day. However, with fuel prices rising once again in May, the IAF has warned of unrest.
  • The agreement between Lebanon's various opposing factions in Doha, Qatar in May could help accelerate Jordan's efforts to strengthen ties with Syria. However, differences over Hizbullah are likely to persist.
  • The IMF has praised Jordan's recent economic performance, but has called for greater budgetary restraint.
  • Import spending surged by 38% year on year in the first quarter of 2008, led by a 126% increase in the oil import bill, raising concerns over the potential scale of the trade deficit this year.
  • The government has pushed ahead with plans to expand wind and solar power-generation capacity and has signed an agreement with France, which will assist Jordan in the building of nuclear reactors.

Content

  • Highlights
  • Outlook for 2008-09: Domestic politics
  • Outlook for 2008-09: International relations
  • Outlook for 2008-09: Policy trends
  • Outlook for 2008-09: Fiscal policy
  • Outlook for 2008-09: Monetary policy
  • Outlook for 2008-09: International assumptions
  • Outlook for 2008-09: Economic growth
  • Outlook for 2008-09: Inflation
  • Outlook for 2008-09: Exchange rates
  • Outlook for 2008-09: External sector
  • Outlook for 2008-09: Forecast summary
  • The political scene: Government bans IAF protests on Israel's 60th anniversary
  • The political scene: The government backtracks on a landlord and tenants law
  • The political scene: IAF and King Abdullah differ over the economy
  • The political scene: Lebanon agreement may help Jordan's relations with Syria
  • Economic policy: IMF calls for more budget restraint
  • Economic policy: More areas are promised higher spending
  • Economic policy: Government avoids court and high costs in casino dispute
  • Economic performance: Import spending leaps
  • Economic performance: Renewable and nuclear energy in the spotlight
  • Data and charts: Annual data and forecast
  • Data and charts: Quarterly data
  • Data and charts: Monthly data
  • Data and charts: Annual trends charts
  • Data and charts: Monthly trends charts
  • Political structure