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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
AMMAN STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Economic and Political Environment
King Abdullah II upon ascending to the
throne following his father's death in 1999,
has provided re-energized economic
leadership. King Abdullah, II bin Al-Hussein
has proven to be a steadfast proponent of
an invigorated program of economic reforms
that includes privatization, structural and
procedural changes that attract foreign
investment and enable foreign debt
restructuring and reduction. He also believes
that efforts should be continued to build a
modern Jordan that provides its men and
women with opportunities for a decent life
and ensures that the gains of development
are distributed equally among the people.
King Abdullah belongs to a new generation
of Western-educated Arab leaders. The
king's political agenda has been focused on
economic revival, greater political openness,
social justice and equality, in order to clearly
place Jordan actively on the regional and
international map. While keeping the warm
ties with the West nurtured by his father, he
has succeeded in improving ties with Syria
and the Palestinians and cementing links
with Saudi Arabia and Kuwait.
Economic Performance
The real GDP growth by end of 2006 was
6.0% compared to 7.2% for 2005.
The decline was due to the decrease in the
extraction industries and non-profit services
producers sectors. By November of 2006,
exports reached US$ 4.65 billion. Jordan
conducts its monetary policy with a fixed peg
to the US dollar and believes that its trade
performance indicates that policy still
provides for good international
competitiveness of its exports. In the past
few years, it has also resulted in virtual
stability in the price level with inflation as
measured by both the GDP deflator and the
CPI. Meanwhile, CPI inflation at the end of
the year 2006 was 6.3%, compared with
3.5% in 2005. As for the fiscal policy
performance, re-estimated figures indicate
an increase of 22.2% in domestic revenues
by the end of 2006 as compared to the year
2005, and a rise of 10.2% in public
expenditures, putting the fiscal deficit at 4.5%
of the GDP.
Jordan's main export commodities are
phosphates, fertilizers, potash, agricultural
products and textiles. Its main imports
include crude oil, machinery, transport
equipment, food, live animals and
manufactured goods. By end of November
2006, exports (exports and re-exports) grew
by 19.7%, and imports increased by 9.2%.
Foreign direct investment (FDI) has been
increased steadily in recent years, by the end
of 2006, it reached US$ 2.9 billion compared
to US$ 1.1 billion for the year 2005. Jordan's
gross international reserves have been rising
steadily over the past several years, and at
the end of 2006, these reserves stood at
more than US$ 6.1 billion, equivalent to the
value of seven months' merchandise imports.
Privatization has moved along quite well. The
centerpiece of the program was the sale of a
large minority ownership in Jordan Telecom
to France Telecom. Recently, the
government sold another part of its stake in
Jordan Telecom to some institutional
investors and to the public and offered new
10% of the company’s shares through an
IPO. Also the government sold 37% of its
stake in the Jordan Phosphate Mines and
sold 80% of the Royal Jordanian Investment.
Many projects are in the pipeline such as
Jordan Post Company, Jordan Mills
Company, and Jordan Agricultural Marketing
and Processing Company. Furthermore,
many privatization actions are taking place in
the field of aviation, power, transportation,
and mining.*
* Information provided by the Amman Stock Exchange
Key Information Contacts
Jordan Securities Commission www.jsc.gov.jo
Securities Depository Center www.sdc.com.jo
Jordan Investment Board www.jordaninvestment.com
Arab Monetary Fund www.amf.org.ae
Ministry of Finance www.mof.gov.jo
Central Bank of Jordan (CBJ) www.cbj.gov.jo
National Information Center www.nic.gov.jo
2006-CONTRIBUTION OF MAJOR SECTORS IN THE GDP (%)
Manufacturing Transport & Communications Financials & Banking
Trade, Restaurant & Hotel Net Taxes Constructions
Government Services Others
15.7
18.6 16.3
GROWTH OF INVESTMENT AND GDP
(%)
50
40
30
GDI
GDP
9.0
9.6
20
10
0
13.0
5.0
12.8
-10
-20
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