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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2005
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.
Key Information Contacts
Jordan Securities Commission www.jsc.gov.jo
Securities Depository Center www.sdc.com.jo
Jordan Investment Board www.jordaninvestment.com
Jordan Country Information www.jordan.jo
Central Bank of Jordan (CBJ) www.cbj.gov.jo
National Information Center www.nic.gov.jo
ECONOMIC RATIOS
Domestic
savings
PAGE 40
Jordan
Lower-middle-income group
Trade
Indebtedness
Investment
Economic Performance:
The real GDP growth by end of the first
quarter of 2005 was 7.7% compared to 7.5%
for 2004. The pickup was due to a huge
jump in exports as external demand grew,
especially from the United States. In the first
half of the year 2005, exports grew by 14.3%
to reach U$2.1 billion. Jordan conducts its
monetary policy with a fixed peg to the U.S.
dollar and believes that its trade
performance indicates that policy still
provides for good international
competitiveness of its exports. In the past
few years, it has also resulted in virtual
stability in the price level with inflation as
measured by both the GDP deflator and the
CPI. Meanwhile, CPI inflation in the first half
of 2005 was 2.1%, compared with 3.3% in
2004. As for the fiscal policy performance,
re-estimated figures indicate an increase of
9.6% in domestic revenues in 2004 as
compared to the anticipated level, and a rise
of 10.7% in public expenditure, putting the
fiscal deficit at US$ 413 million, or 3.9% 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. In 2004, exports
(exports and re-exports) grew by 14.3%, and
imports increased by 31.3%. Foreign direct
investment (FDI) has been increased steadily
GROWTH OF INVESTMENT AND GDP
(%)
6
4
2
0
-2
-4
-6
-8
-10
-12
97
GDI GDP
in recent years. In the first quarter of the year
2005 it reached US$ 195 million compared
to US$ 480 million in 2004. Jordan's gross
international reserves have been rising
steadily over the past several years, and in
the first half of 2005, these reserves stood at
more than US$ 4.7 billion, equivalent to the
value of seven months' merchandise
imports. 1
Privatization has moved along quite well. The
centerpiece of the program was the sale of a
large minority ownership (along with
management control) in Jordan Telecom to
France Telecom. The government also sold
half of its holdings in the Arab Potash
Company in mid-October 2003 and a
majority of its stakes in its electricity
companies in the first half of 2004.
Furthermore, a new gas pipeline between
Egypt and Jordan has been completed by
the private sector, and is expected to be
extended to Lebanon, Syria, and Turkey.
Even the post office has been put out to
foreign management. Several public
enterprises are being restructured in 2004 to
be privatized in the year 2005. The flow of
privatization related funds is earmarked for
debt reduction and for funding of
development programs under the Plan for
Social and Economic Transformation.
1 Economic and Political Overview, County Watch
Incorporated, 2005
98 99 00 01 02 03
* World Bank reports