Jordan’s GDP growth slows to 2.8% y/y in Q3 2013

By bne IntelliNews January 2, 2014

Jordan's real GDP growth cooled to 2.8% y/y in the third quarter of 2013 from 3.1% in Q2 as the economy’s main sectors continued to expand but at a slower pace, data from the stats office DoS showed. In January-September 2013, the GDP growth averaged 2.83% y/y. Despite the partial spillovers of the Syrian turmoil and the related inflow of refugees into Jordan, the country has benefited from its stable political and security environment, rising remittances from expatriates and strong private consumption to boost GDP growth.

Jordan’s GDP growth will increase to 3.3% in 2013 from 2.8% a year earlier, on rising government capital spending, higher domestic consumption and a recovery in exports, the IMF said in its latest World Economic Outlook published in October. The EBRD forecasts a 3.0% GDP growth for 2013 and said that Syrian refugees continue to strain public service provision, public finances, and labour market conditions.

The construction sector was the best performer in Q3, growing 7.9% y/y after a 9.5% increase in Q2. Strong local, expat and Arab demand for housing remain the main growth engine. Fewer working days in the summer likely cut the sector’s output.

The transport and logistics sector was the second best performer in Q3 2013, expanding 5.1% y/y (up 3.6% y/y in Q2) due to strong activity though Iraq and the GCC.

The agriculture output growth retreated to 4.5% y/y from 8.7% growth in Q2. The social services sector followed also at 4.5% y/y given strong public spending. The financial services, insurance and real estate sector expanded 3.7% y/y in Q3, down from 4.1% a quarter earlier.

A strong tourism season during the summer lifted the trade, hotel and restaurants output by 3.3% y/y in Q3, up from 1.8% the previous quarter. The financial services, insurance and real estate sector expanded 3.7% y/y in Q3.

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