Growth by the IMF

The IMF is given to predicting outlooks, and one thing it predicts annually is the world economic outlook (WEO).

This year, it predicts a world growth of 3.6 per cent in, up from 3.3 per cent in 2013.

Jordan is expected to grow at 3.5 per cent, up from the 2.8 per cent of last year (the IMF had predicted 3 per cent).

Advanced economies are forecast to grow at 2.2 per cent in 2014, up from 1.3 per cent in 2013, as investors and banks show signs that they are optimistic and less worried about the sustainability of sovereign debt levels.

Among the advanced economies, the US is to show a strong recovery, at 2.8 per cent, while the UK tops the list of advanced economies at 2.9 per cent.

Germany is in third place, with a growth rate of 1.7 per cent, and Japan at 1.4 per cent is in fourth place.

The strength of the recovery in these economies will be boosted by the rise in demand, which varies across the spectrum. Even the southern countries of the EU are forecast to have positive growth as the recovery spills over into their troubled economies.

Low levels of growth in advanced economies are welcome, or at least acceptable, due to the fact that in many, the population growth rate is less than 1 per cent and in some, as Japan, it is even negative (-0.2 per cent).

To determine whether the income per capita (average income) has risen or fallen, the population growth rate is subtracted from the economic growth rate; if the remainder is positive, one can be sure that the average income has increased.

Consequently, the average income in the US increased by 2.06 per cent because the population grew at 0.74 per cent; in the UK by 2.15 per cent (population growth was 0.75 per cent) and in Japan the growth was 1.6 per cent.

Emerging and developing economies are forecast to grow at 4.9 per cent, with China growing at 7.5 per cent and India at 5.4 per cent.

Notwithstanding, potential growth in many emerging market economies appears to have diminished.

The Middle East growth rate is expected to fall between 2 and 4 per cent. 

Underlying this rate are several assumptions: aid from the Gulf, political stabilisation and economic reform in Egypt, and the fact that the Arab Spring has not elsewhere.

Jordan, according to the World Bank, has a population growth rate of 2.19 per cent, which means that the average income grew by 1.31 per cent.

Yet, if one were to account for the increase in the number of residents (population plus expatriate workers and refugees), the increase in the number of residents will far exceed 10 per cent, and may even reach 12 per cent, which would alter the net increase in average income from a positive to a negative rate.

One hopes to see more positive news regarding the economy as investment in renewable energy takes off.

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