Ammon – Fitch Solutions raised its forecast for Jordan’s real GDP growth for 2023 from 2.6% to 2.8%, representing stronger growth than the 2.5% growth in 2022, in a special research report on Jordan.
The revision came after the GDP for the first quarter of 2023 showed a growth of 2.8% on an annual basis in the third quarter of the year, as all sectors made a positive contribution to the growth of real GDP, and the strongest contribution was in the manufacturing, financing and transportation sectors, as well as in trade. wholesale and retail.
The corporation said that the wholesale sector grew by 3% on an annual basis in the first quarter of this year, higher than the average of 2.5% in between 2010 and 2019, and this likely means strong domestic demand, a trend that the corporation believes continued in the second quarter of 2019. 2023 and will continue in the second half as well, according to the Kingdom.
The Corporation expected that remittance growth would remain strong, in line with the strong performance in the GCC countries, which host the largest share of Jordanian expatriates. The Corporation also expected that domestic demand would benefit from lower inflation in the second half of this year, expecting inflation to remain in a downward trend. during the remainder of the year.
The Foundation also indicated that the decline in the unemployment rate will also lead to support for domestic spending, as the unemployment rate decreased in the fourth quarter of 2022, to 21.9% from 22.9% in the third quarter of the same year; It is expected that it will continue to decline to an average of 21.7% in 2023.
The Corporation expects the growth of Jordanian exports, which will accelerate this year compared to last year, supported by mining production, including potash, as potash production volumes grew by an average of 7.8% in the first five months of 2023.
The corporation expected growth in government consumption and total fixed capital investment in line with the current spending target set out in the Government’s General Budget Law for the year 2023.
IFC believes that the investment will also provide a stronger contribution to overall real GDP growth for Jordan, supported significantly by construction activity and will be bolstered by efforts to develop tourism-related infrastructure as part of the Economic Modernization Vision Plan.