The gross domestic product (GDP) grew by 2.26 per cent during the first quarter of this year, a figure considered by experts as “reasonable” in light of regional upheaval.
According to Department of Statistics (DoS) figures, the growth during the first three months of this year, which was slightly higher than the 2.03 per cent recorded during the same quarter of 2010, was driven by an expansion in key economic sectors, mainly the extraction sector that expanded by 43 per cent compared to the same period of last year.
The sectors of finance, insurance and real estate were second as they grew by 5.6 per cent, while the construction sector saw the largest decline by 17.7 per cent followed by water and electricity by 1 per cent, according to DoS initial report.
Indicating that the first quarter of each year usually witnesses the lowest growth rate, Finance Minister Mohammad Abu Hammour expected the Kingdom’s economy to pick up during the remaining period of this year to achieve the forecast growth of 3.5 per cent for the entire year.
Among other indicators for better economic performance, Abu Hammour pointed out an increase in local exports during the first five months, a rise in credit facilities and a surge in real estate sector trading, which went up by 42 per cent compared to the first five months of last year.
However, the official noted that the challenges facing the economy include an 11 per cent drop in tourism income, which he said was caused by regional unrest.
“Although the country’s tourism revenues declined, its performance is still much better than other competitors among regional countries such as Egypt, Tunisia, Syria and Lebanon,” he remarked.
In light of ongoing instability in the region, the 2.26 per cent growth in the GDP is still positive, Abu Hammour told The Jordan Times over the phone, echoing the remarks of other economists.
Agreeing with Abu Hammour that growth rates during the first quarter of each year is usually lower than other quarters, economist Fahed Fanek, however, described the figure as modest.
With the political instability in the Arab world, which affected tourism revenues and remittances of Jordanians abroad, the growth achieved is still reasonable but not impressive, he said.
Economist Zayyan Zawaneh also highlighted regional impact on the economic performance of the Kingdom, adding “we will be lucky” if the country’s economy keeps the same pace of growth in light of the unrest in the region.
Noting that the 2.26 per cent GDP growth is equal to the population growth rate, he said: “Policy makers could have taken some measures to stimulate the economy but unfortunately they were late in doing so, particularly in boosting the tourism sector.”
Zawaneh, a former adviser at the Central Bank of Jordan, the Ministry of Finance and the International Monetary Fund, also blamed the large number of sit-ins and work stoppages that swept the Kingdom over the past few months for curbing growth rates as he explained they negatively affected the flow of investments.
Asked on his expectations for the economic growth level for the entire year, the economist indicated that 2.8 per cent would be an achievement amid regional unrest and “the government’s apathy towards economic woes”.
However, economist Yusuf Mansur differed with Abu Hammour and the analysts that regional turmoil slowed down economic growth, insisting the unrest in the region could have been an opportunity to stimulate the economy by attracting investments and capital.
“If there had been proactive policies and a proactive government, the country could have benefited from the events in the region,” he told The Jordan Times, adding the growth figure achieved in the first quarter was expected to be this modest as policy makers “do not pay enough attention to the economy”.
The public believes that the government does not have an economic programme, Mansur claimed.