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Low growth in 2013

Apr 06,2014 - Last updated at Apr 06,2014

As expected, the economic growth rate in 2013 was very low. It did not exceed 2.8 per cent, which is not much higher than the population growth rate, even if we ignore the contribution of the Syrian refugees, on the consumption side.

The result is that the per capita income did not improve in a tangible manner.

Under the current unfair distribution of income, the number of families with lower standards of living must have risen, worsening the poverty rates.

Perhaps it is pure coincidence that growth rates during the past three years — 2011, 2012 and 2013 — were rising by the bare minimum of one tenth of one per cent per year, i.e., 2.6 per cent, 2.7 per cent and 2.8 per cent respectively.

The second “coincidence” is that the deflator of the gross domestic product was identical to the inflation rate based on consumer prices, i.e., 5.6 per cent, even though the two indicators are built on different bases.

One cannot escape the observation that the material production sectors sustained negative growth rates, like in the agriculture and mining sectors.

Growth was very low in manufacturing, electricity and water, while services sectors achieved better results and registered reasonable growth rates. 

These dismal results did not come as a surprise. No one was expecting high economic growth rate in 2013, still the growth rate in 2013 turned out to be on the low side of predictions.

Yet there are analysts who express satisfaction that the economy managed to register a positive growth rate, low as it may be, under the prevailing difficult circumstances.

It is, of course, quite difficult to make a prediction about the rate of economic growth in 2014. Expectations range between 3 per cent and 3.5 per cent.

A possible improvement may come about due to higher capital expenditure from the central government budget, due to the generous grant of the Gulf states.

The tables issued by the Department of Statistics indicate that salaries and other fringe benefits paid by the government to its civilian, military and security personnel in 2013 amounted to JD4.8 billion, equal to 20 per cent of the gross domestic product.

This item is the largest among all sectors of the economy. It rose in 2013 by 7.6 per cent in current prices, and 2.4 per cent in constant prices.

Taxes and fees on commodities, net of subsidies as negative taxes, amounted to JD2,870 million. They rose by 7.6 per cent in current prices and 3.2 per cent in constant prices.

We used to assume that the value of the gross domestic product in 2013 was around JD22 billion, and would rise to JD24 billion in 2014. 

According to the Department of Statistics, the GDP in 2013 turned out to be close to JD24 billion. Assuming that the GDP growth rate in 2014 will be 8 per cent in current prices, GDP will reach JD25.7 billion, a per capita income of JD3,671 ($5,176).

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