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Series of steps
A recent study by the Jordan Strategic Forum showed that investor confidence in the Jordanian economy has fallen, marking the fifth consecutive drop, down 16.4%. The forum believes that the decline is alarming and the government must work hard to stabilize the overall economy.
Forum chairperson Dr. Nisreen Barakat said the decline in confidence in Jordan’s economic indicators was one of the most prominent reasons for the drop in investor confidence.
Barakat went on to say in an interview with Roya that the growth rate recorded in the first quarter of this year (2024) is the lowest ever recorded in all previous periods, recording a 2% growth rate compared to the first quarter of 2023, when the figure was 2.8%.
Studies have shown that the budget deficit and the increase in debt have mainly affected investor confidence. Muhled Omari, an economic expert specializing in investment matters, said that the unrest affecting the region has a direct impact on macroeconomic indicators, but according to Omari, the government must adopt a package of measures to avoid the decline in economic indicators and its impact on investment.
In his address to Roya, Omari suggested taking steps through investment funds to enhance and highlight investment opportunities and the contribution of government departments to investment projects, especially major strategic projects.
The expert called for the need for a package of incentives, such as reducing energy costs and costs related to human resources, noting that this could increase attractiveness for investors despite regional unrest.
The Jordan Investor Confidence Index published by the Jordan Strategic Forum fell by 16.4% in the first quarter of this year (the highest level since the decline in the first quarter of 2020) to 135.5 points. In the previous quarter (the fourth quarter of last year), it was 162.2 points.
The economic activity confidence index fell from 145.2 points in the fourth quarter of last year to 100 points in the first quarter of this year (the largest drop since the first quarter of the epidemic year).
In the first quarter of this year, real GDP growth reached about 2%. In the same period last year, the growth rate reached 2.8%, and in the fourth quarter of that year, the growth rate was about 2.3%. In the first quarter of this year, the general budget deficit after grants was about 428.8 million dinars.
This compares to 463.3 million dinars in the fourth quarter of last year and about 382.9 million dinars in the first quarter of the year.
Foreign direct investment inflows in the first quarter of this year amounted to approximately 95 million dinars, compared to 98 million dinars in the previous quarter.
The industrial production index fell to 85.3 points in the first quarter of this year after reaching 88.8 points in the fourth quarter of last year.
On the other hand, the monetary system confidence index in the first quarter of this year (200 points) improved compared with the previous quarter (166.4 points).
The value of the central bank’s foreign exchange reserves also increased from 12.85 billion dinars in the fourth quarter of last year to 13.19 billion dinars in the first quarter of this year.
The interest rate gap between the dinar and the dollar widened from 2.13% in the fourth quarter of last year to 2.17% in the first quarter of this year.
The value of returned checks also fell by 9.6%, from 441 million dinars in the fourth quarter of last year to 398.8 million dinars in the first quarter of this year. The financial system confidence index fell from 191.9 points in the fourth quarter to 142.1 points in the first quarter of this year.
In the first quarter of this year, the stock index rose 0.6 points from the previous quarter to 4416.9 points.
The ratio of shares purchased by foreign investors to those sold on the Amman Stock Exchange declined, reaching 53.8% in the first quarter of this year, compared with 169.1% in the fourth quarter of last year.
Bank credit extended to the private sector in the first quarter of this year increased by 1.3% from the previous quarter to 30.56 billion dinars.
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