Business Monitor International


Jordan and the West Bank & Gaza Business Forecast Report

Published 26 March 2014

  • 57 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Jordan and the West Bank & Gaza Business Forecast Report

Core Views

  • We maintain the view that Jordan's long-term political outlook is among the most stable in the region, with the monarchy having implemented a series of political and economic reforms in recent years. Nonetheless, the social uprisings that emerged in the region since 2011 are indicative of the threat that low living standards and lack of political freedoms pose to long-term stability. While we expect the regime to navigate through its current troubles, deteriorating economic conditions and public finances are reducing its margin of manoeuvre.

  • Growth in the Jordanian economy will be driven by solid construction activity over the coming quarters, backed by development grants from the Gulf Cooperation Council and multinational donors. Regional instability will remain high and continue to weigh on Jordan, preventing a more substantial recovery in tourism activity or foreign direct investment inflows. We forecast real GDP growth to accelerate to 3.3% and 4.1% in 2014 and 2015 respectively, from an estimated 2.7% in 2013.

  • Jordanian industry will struggle against regional competitors through the coming years, weighed down by rising energy costs and multiple tax increases. That said, the government's ongoing energy diversification efforts should reap dividends for Jordanian firms over the longer term, while we see other countries increasingly scaling down industrial subsidies going forward, evening out cost differentials.

Key Risks To Outlook

  • Maintaining consolidation measures will be key to persuading international donors to speed up their assistance to the country. However, actual delivery of funds has been slow in the past, and there could be a risk that the coming years turn out to be poor ones for Jordan in terms of foreign grants. This would once again raise fears over the possibility of an uncontrolled devaluation of the dinar.

JORDAN - CORE FORECASTS
2012 2013 2014f 2015f 2016f 2017f 2018f

Table of Contents

Executive Summary - Jordan
11
Core Views
11
Key Risk To Outlook
11
Chapter 1
13
SWOT Analysis
13
Foreign Policy
14
Increased Stability, But External Risks Remain
14
TABLE: POLITICAL OVERVIEW
14
Long-Term Political Outlook
16
Further Reforms On The Horizon-
16
Chapter 1
19
SWOT Analysis
19
Economic Activity
20
Performance To Improve Amidst Challenging Regional Environment
20
TABLE: ECONOMIC ACTIVITY
20
Oil & Gas Sector Outlook
23
Economics Trumps Politics In Jordanian-Israeli Deals
23
Monetary Policy
25
Inflationary Pressures Remain
25
TABLE: MONETARY POLICY
25
Banking Sector Outlook
26
Banking Sector: Showing Resilience
26
TABLE: BANKING SECTOR OVERVIEW
26
Chapter 1
29
The Jordanian Economy To 2023
29
Exports Driving Long-Term Growth
29
TABLE: Long-Term Macroeconomic Forecasts
29
Chapter 1
31
SWOT Analysis
31
Executive Summary - West Bank & Gaza
33
Core Views
33
Key Risk To Outlook
33
Chapter 2
35
SWOT Analysis
35
Domestic Politics
36
No Progress Expected In Peace Process
36
Long-Term Political Outlook
37
Monumental Obstacles To Statehood
37
Chapter 2
41
SWOT Analysis
41
Economic Activity
42
Modest Recovery, Confined To West Bank
42
TABLE: ECONOMIC ACTIVITY
42
TABLE: FISCAL POLICY
43
Chapter 2
45
West Bank & Gaza Economy To 2023
45
Long-Term Growth Outlook Far Below Potential
45
TABLE: Long-Term Macroeconomic Forecasts
45
Chapter 2
49
SWOT Analysis
49
Chapter 3: BMI Global Assumptions
51
Global Outlook
51
Global Growth Optimism Turning To Disappointment
51
Table: Global Assumptions
51
Table: Developed States, Real GDP GrowtH, %
52
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
52
Table: Emerging Markets, Real GDP Growth, %
53

The Jordan and the West Bank & Gaza Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Jordan, West Bank and Gaza and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Jordan, West Bank and Gaza's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Jordan, West Bank and Gaza's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Jordan, West Bank and Gaza's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Jordan, West Bank and Gaza, including currency volatility, the commodity price boom and protectionist policies.

The Jordan and the West Bank & Gaza Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Jordan, West Bank and Gaza economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Jordan, West Bank and Gaza through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Jordan and the West Bank & Gaza Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Jordan, West Bank and Gaza and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Jordan, West Bank and Gaza, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Jordan, West Bank and Gaza over the next 5-years?

BMI's Jordan, West Bank and Gaza country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Jordan, West Bank and Gaza Market - Political Strengths, Weaknesses, Opportunities and Threats facing Jordan, West Bank and Gaza.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Jordan, West Bank and Gaza's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Jordan, West Bank and Gaza's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Jordan, West Bank and Gaza, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Jordan, West Bank and Gaza's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in Jordan, West Bank and Gaza will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Jordan, West Bank and Gaza's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express