Country Trade Risk Index (ERI): 100.50
Country risk reference rating: Level 5 (5/9)
Country Risk Outlook: Negative
Economic and trade risks
The Jordanian economy is among the least developed economies in the Middle East. Its economic structure is relatively simple, lacks endogenous power, and relies heavily on the external environment. Energy shortages have led to high inflation, and problems such as poverty and unemployment have also long plagued the Jordanian economy. Jordan’s current external debt pressure is not great, but its huge trade deficit and high public debt have led to a high fiscal deficit and heavy reliance on external aid. The Jordanian government has been facing financial deficits all year round and now relies mainly on huge aid projects from the United Nations and Gulf allies. In 2012, Jordan’s nominal GDP was US$31.06 billion, and per capita GDP was US$4,750; the real economic growth rate was 2.7%, and the inflation rate was 4.8%. Judging from the current situation, the endogenous power of Jordan’s economy is unlikely to improve in the short term, and it is difficult to make a substantial breakthrough in its ability to attract foreign investment. The problem of high youth unemployment will continue to plague Jordan’s economy for a long time.
Bilateral trade and investment
Despite being disrupted by negative factors such as the global economic slowdown and turmoil in the Middle East and North Africa in recent years, the bilateral trade volume between China and Jordan has continued to increase steadily year by year. The bilateral trade volume between China and Jordan jumped from US$1.18 billion in 2007 to US$1.18 billion in 2012. 3.26 billion US dollars in 2016, with an average annual growth rate of 4.16%. At present, China is Jordan’s largest import source country besides crude oil products. Jordan mainly imports machinery, electronic products, textiles, clothing, shoes and hats and other commodities from China. China mainly imports mineral products such as potassium fertilizer and copper from Jordan. At present, the problem existing in China-Jordaan bilateral economic and trade cooperation is trade imbalance, and China has a large trade deficit for a long time. The trade structure is single; the current bilateral trade volume between China and Jordan is still at a low level, and there is a lot of room for trade between the two countries to explore; geographically, China and Jordan are relatively far apart, and there are huge differences between the two countries in terms of language, religion, culture, and customs. , which will hinder the establishment of deeper economic and trade relations with each other to a certain extent.
Business environment
Jordan’s business environment is at a medium level. Public financial information of enterprises is difficult to obtain, and enforcement of contracts is relatively inefficient. In terms of the stability of power supply capacity and the degree of tax burden, Jordan’s ranking is significantly ahead of the average level in the Middle East and North Africa region. Generally speaking, it is conducive to enterprises to carry out business activities, but it performs poorly in terms of credit support and investment protection. Some departments in Jordan have problems such as low administrative efficiency and low transparency, which are being improved year by year under the government’s vigorous management. Although the scale of foreign investment attracted by Jordan has declined in the past three years, the overall environment for Jordan’s economy to absorb foreign investment has improved year by year, and the various obstacles faced by foreign investors in Jordan are gradually reducing. Jordan has complete infrastructure and good road traffic conditions; there is a certain pressure on power supply, but it can basically meet demand. The Jordanian government has strong social control capabilities, but the power of labor unions is limited.
Overall risk assessment
Generally speaking, various risk levels in Jordan are greatly affected by changes in the external environment, and there is uncertainty in the future risk development trend. The Jordanian economy is among the least developed economies in the Middle East. It is in short supply of natural resources such as fresh water and oil, and relies heavily on external imports and aid for basic commodities such as food and energy. It lacks endogenous driving force for economic growth and suffers from long-term problems such as severe poverty and high unemployment. Troubled by problems, the inflation rate remains high and the huge fiscal deficit is difficult to alleviate in the long term. Cooperation with Iraq is expected to be further strengthened and growth is expected to remain low in the future. Assistance from the United States, Europe, the Overseas Cooperation Council, the World Bank, and the International Monetary Fund is crucial for Jordan to achieve fiscal balance, and there will be no risk of foreign debt defaults in the short term.
Based on the analysis and assessment of the current overall situation, Jordan’s country trade risk index (ERI) is 100.50, the country risk reference rating is 5 (5/9), the country risk level is medium to high, and the country risk outlook is negative . (Issuing agency: China Export and Credit Insurance Corporation)
