Will economy be better in 2017?

We do not have to wait until the end of 2017, plus several months of the following year, for facts and figures to know whether Hani Mulki’s government succeeded in the implementation of the economic reform programme planned for 2017, or whether failure, big or small, occurred.

The data available on the first half of this year does not mean that we know the data for the whole year with a reasonable degree of accuracy. However, such data shows the general trend, especially when surprises in the second half of the year are not expected to justify a major revision of objectives and evaluation of outcome.

There is a strong possibility that the government will not end 2017 with full success, and that it will find itself, as usual, looking for excuses and naming unfavourable circumstances for its failure to achieve the realistic objectives it contributed to setting, accepted and made a commitment to implement.

A set of objectives, figures and indicators has to be realised by the end of the year.

It seems that the government took some steps in that direction during the first half of the year, but not to a satisfactory degree.

Under such assumption, we are allowed to reach the provisional conclusion that the government did actually make progress, but it did not achieve all the targets set in the economic reform programme, as expressed in numbers and ratios.

The economic growth rate this year will most likely be slightly better than it was last year, but not to the degree desired. 

Jordan will continue for quite some time to live with low economic growth rates. Efforts to motivate growth did not give the desired results.

Despite government efforts to reduce current expenditure and raise domestic revenues, it seems that the budget deficit before grants will not be reduced enough to achieve the objective of having a deficit not exceeding JD753 million.

The rate of debt to gross domestic product was reduced by one percentage point. This is of course welcome, but the reason is that the Treasury withdrew funds from its deposits in banks.

Net debt actually rose by 1.5 percentage points, an indication that the government will not be able to achieve the longer-term objective of reducing the debt rate to 77 per cent of GDP during the coming four years.

Other indicators can be taken into consideration, such as growing unemployment rate, widening trade deficit and current account of the balance of payments.

To be fair, one cannot deny the fact that the government did try and is still trying, but the targets are beyond its ability.

The end result is that the economic reform programme for 2017 will not be achieved in full.

There is still plenty of time this year to accelerate reform and make up for the shortcomings.