Economic trends
Jordan is classified by The World Bank as a "lower middle income country." It is a small country with limited natural resources. Recent economic reforms aimed to liberalize trade and to attract investments, have allowed Jordan to show a good performance. Until 2007, the GDP growth rate has been kept at around 6%. Poverty, unemployment (about 12%) and a large foreign debt are the main problems of the country. The Jordanian economy remains vulnerable to external shocks and regional unrest. It is also very dependent on foreign aid. In 2007, its budget deficit rose to more than 8% of GDP. This is mainly due to the increase in subsidies for food and energy products associated to a decrease in international aid.
Jordan was very little affected by the financial crisis of 2008 and the country has experienced a moderate economic slowdown in 2009. The fall in price of raw materials and basic food products in 2008 has helped to boost the consumption. However, it has declined in 2009, due to the reduction in money transfers from the immigrant workforce in the countries of the Gulf, affected by the economic slowdown. In the context of the global economic crisis, exports have also decreased in 2009.
Main branches of industry
Agriculture represents about 2% of GDP. The lack of water creates an obstacle to agricultural development. The principal crops are wheat, barley, lentils, tomatoes, eggplants, citrus fruits, olives and grapes. Phosphates and potassium are the only natural resources. The manufacturing sector is rather limited and dominated by textiles, a sector in a state of crisis at the present time due to international competition.
Industry and mining together contribute nearly 30% to GDP. The government encourages the new information technology and tourism sectors.
The services sector contributes two thirds to GDP. Jordan is particularly active in the fields of communication technologies and financial services. The sectors of distribution and tourism infrastructures also contribute substantially to GDP even if they experienced a slowdown in 2007, registering a growth of 5% against 6.5% in 2006. The construction and transport sectors are in full boom.
International trade
Jordan is very open to international trade. The share of foreign trade in the country's GDP is around 135%. It registers a structural deficit of its balance of trade due to its dependence on raw materials. Jordan is a member of the WTO and signed a free-trade agreement (FTA) with the USA in December 2001 which removed customs duties on the majority of goods and services until 2010. Jordan has also signed an Agreement of Association with the EU. The country’s top three export partners are: the USA, Iraq and India. The commodities mainly exported are clothes & clothing accessories, fertilizers, pharmaceutical products and edible vegetables. The top three import partners are: Saudi Arabia, China and Germany. Jordan mainly imports mineral fuels & oils, vehicles, machinery, and electric & electronic equipment.
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