News

AMMAN-----December 20, 2012------The Economic Policy Development Forum (EPDF) in cooperation with the USAID/Jordan Fiscal Reform II Project (FRP II) organized an exciting and comprehensive roundtable on Jordan Macroeconomic Trends headed by Dr. Janusz Szyrmer, Macroeconomic Advisor at FRP II at Talal Abu-Ghazaleh Knowledge Forum.

The event was attended by HE Dr. Talal Abu-Ghazaleh, chairman of Talal Abu-Ghazaleh Organization and the Economic Policy Development Forum in addition to academics, businessmen, diplomats, economists and media.

The event was moderated by HE Dr. Mohammad Abu Hammour, former Minister of Finance who welcomed the guests and thanked HE Dr. Abu-Ghazaleh for hosting such as important event in such a crucial time.

According to the macroeconomic expert, who has over 30 years of experience in development economics, fiscal policy, statistics and econometric modeling, "Jordan’s trends of output and labor force growth have been quite impressive."

"The Kingdom's GDP has been growing much faster than that of its main trading partners with advanced market economies (Europe and the USA). The numbers of highly educated Jordanians (the human capital) were growing at a higher rate than employment in the private sector," Dr. Szyrmer said.

"The dynamic growth was supported by large inflows of foreign transfers which stimulated real appreciation of the dinar with respect to the dollar and the euro, afflicting the country with a (still mild but potentially harmful) Dutch Disease. The tradable goods produced by agriculture and manufacturing as well as other exportable outputs have been made increasingly expensive and many of them, instead of being shipped to the international market, have been delivered to domestic consumers," he added.

According to Dr. Szyrmer who also served as an advisor to governments and think-tank policy advocacy/consultancy organizations of Poland, Kosovo, Ukraine, Azerbaijan, Tunisia and Jordan in addition to others believes that Jordan is suffering from multiple deficits: in current account, foreign trade, central government budget, and consolidated budget covering also governmental agencies, commissions and projects.

"Jordan tends to spend more than the country is producing. Particularly acute deficits have developed in trade with Asia and Europe, the latter has been growing in the wake of trade agreements with the European Union. An increasing current account deficit is also caused by the declining foreign factor income, falling foreign direct investments, and decreasing net private transfers (remittances)," he said.


"Sovereign debt of Jordan after an impressive decline in 2003-08 and stabilization in 2009-10, have begun growing again reaching 79% of GDP at the end of June 2012. A recent stand-by arrangement with the IMF should help the country in the short run," however, and according to Dr. Szyrmer "This IMF support would result in an increased indebtedness."

Dr. Janusz Szyrmer sees that both budget domestic revenue and expenditure display an inverted “U” shape:"In 2011, Central government domestic revenue accounted for only 62% of expenditure. Foreign grants have helped reducing the deficit but were not sufficient to cover it entirely."

According to Dr. Szyrmer, two tax categories have managed to grow in the Kingdom.

"The tax on sales of goods and services and the corporate income ta