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The Jordanian economy in 2018

Jan 22,2018 - Last updated at Jan 22,2018

Now that the 2018 State Budget Law has passed in both the Lower House and the Upper House, it is ready for the ratification and publication in the Official Gazette.

Its ratification means that the new government policy is directing subsidy of bread to qualified Jordanian consumers. Those will actually pay the non-subsidised price of bread, but will be compensated in cash to be added to their monthly incomes. Rich Jordanians and all non-Jordanians will not be compensated.

The passing of the new 2018 State Budget Law will also entail the imposition of a sales tax on major staples such as sugar, tea, rice and milk, etc… which have been so far exempted.

The Budget Law, which should increase the governments’ domestic income by at least JD450 million to keep the current debt/GDP ratio at 95 per cent, is expected to introduce a new income tax law, which would facilitate a more proper collection and prevent tax evasion and even tax avoidance if possible.

Although the public in general has frowned upon such measures, they have been the minimum steps the government can take to meet its International Monetary Fund-brokered deal and the maximum measures, which the people can understand and live with.

Yet, the question that looms over is whether the economy will provide evidence that the protracted slow-down is about to take an upward-turn. The average Jordanian is deeply worried that the economic and political situation that has prompted the slowdown may even witness an increase in severity.

There are signs of improvement in certain sectors of the economy, but over-all the major indicators are not encouraging. While income from tourism and fiscal performance showed signs of improvement, the rest of the economic sectors had barely remained as they were or even worsened. 

The most worrying indicators are unemployment which exceeds over 18.5 per cent, poverty that stands at 25 per cent, and a rise in the real cost of living of 3.5 per cent in contrast with constant wages and incomes. Both trade and industry are not healthy, and 2018 may witness a large wave of bankruptcies or near bankruptcy as a result of increasing costs, lower sales and shortage of cash.

A safe and smooth passage of goods and people through land borders with Syria, Iraq and Saudi Arabia is still thwarted by administrative and security dilatory procedures. The unfolding of both the Syrian and Iraqi crises has not yet translated itself into tangible reality which businessmen can feel ominous about.

On the other hand, the political news coming from Washington and Jerusalem are not reassuring. The process to liquidate the whole Palestinian rights in an independent and sovereign state is melting. The "Deal of the Century" is rejected by all Palestinian factions. How this would impact the economic situation in Jordan is still fraught with difficult possibilities.

Thus in general, Jordanian economic expectations are more dismal than they had been this time last year. What could be done about it? A lot. But we need scientific management of macro-planning, organised overall strategy, and micro-targeting. 


While Jordan boasts the achievement of IT and better e-payment system in the private sector, the ability to pay your bills and taxes to the government is not working. The government IT uses impressive hardware and software apparata, but the output is extremely low. At least fix e-government output if the government wants faster and regular returns from the market place. 

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That wasnt very intresting..................!!!!!!!!!!!!!!!!!!

Agreed, Paul M. Economic ties often enhance political relationships.

Before Dr Samuel chips in with his, often used, South African reference - Botswana was not one of the front-line states during the, so-called 'Apartheid Era'. The country's leader, at the time, decided that whilst the people's of Botswana did not agree with South Africa's politics etc, they would trade with them, the rest, some would say, is history?!

Notwithstanding Jordan's existing peace agreement with Israel, Jordan could significantly prosper (economically) with bi-lateral trade agreements with its Western neighbour, but still oppose that country's politics at every diplomatic level (until a regional settlement is reached)?

I am surprised that the writer did not mention the transport of goods from the Med sea, from the port of Haifa and then over the Jordan river into Jordan. This has proved to be secure and efficient. Does the writer not wish to encourage this transport route for Jordan’s benefit?
Also, why not suggest more joint Israeli Jordanian enterprises? Israel has high demand for high tech talent, among other areas.

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