Jordan and the West Bank & Gaza Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

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  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
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Jordan and the West Bank & Gaza Country Risk Report
Product Price
$1,195.00

Core Views

  • International recognition of a Palestinian state is gathering momentum, a trend that will continue over the next decade and deepen Israel's diplomatic isolation. However, actual statehood remains a far-off prospect.

  • The dissolution of the Palestinian unity government in June 2015, followed by President Mahmoud Abbas' resignation from the chairmanship of his political faction in August, point to a growing governance vacuum in the West Bank and Gaza. The risk of a comprehensive collapse of the Palestinian political system is increasing, amidst a stagnating economy and the multitude of challenges confronting the Palestinian leadership. Tensions between the rival Palestinian factions will remain high, preventing the reconstruction of the Gaza Strip and fuelling political instability.

  • Elevated political risks, a continued decline in competitiveness, and an overreliance on debt amidst shrinking donor disbursements all present constraints to the Palestinian territories' economic outlook. In our baseline scenario, which assumes no major change to the political situation, growth will reach 3.6% this year, compared to an annualised 5.7% between 2010 and 2014.

  • Israeli-Palestinian peace talks resumed in August 2013, but failed to progress past their April 2014 deadline. We retain our view that despite efforts by US Secretary of State John Kerry, the current political configuration in Israel, combined with the increasing fragmentation of the Palestinian governance system, will hinder any progress in negotiations.

Key Risks

  • The wave of violence raging across Israel and the occupied West Bank since October 2015, aside from its negative implications for the Israeli economy, underscores the growing crisis of legitimacy faced by the Palestinian leadership. Although not our core scenario, the danger of a third intifada is growing and constitutes one of the main risks for the broader region over 2016.

  • Any sustained punitive economic measures imposed by Israel that further constrain exports and imports, or disrupt governmental revenue flows, would pose downside risks to our forecasts for growth and the government budget.

  • Popular discontent, either with Israel or the lack of progress among Fatah and Hamas, could lead to social unrest and thereby undermine the growth prospects of the West Bank and Gaza, and weigh on the territories' political risk profile.

Macroeconomic Forecasts (West Bank and Gaza 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y -0.4 3.4 3.6 3.9
Nominal GDP, USDbn 12.8 13.9 14.8 15.8
Consumer price inflation, % y-o-y, eop 0.7 1.0 2.5 3.0
Exchange rate /USD, eop 1.00 1.00 1.00 1.00
Budget balance, % of GDP 3.2 -1.0 -1.0 -0.9
Current account balance, % of GDP -10.9 -13.5 -12.8 -15.0
BMI Index
6
BMI Risk Index - Jordan
6
BMI Risk Index - West Bank & Gaza
7
BMI Index League Tables
9
Executive Summary - Jordan
11
Core Views
11
Key Risks
11
Chapter 1
13
SWOT Analysis
13
Economic Growth Outlook
14
EU Response To Refugee Crisis To Increase Economy's Resilience
14
TABLE: SELECTED FTAS AND FTA NEGOTIATIONS
14
GDP By Expenditure Outlook
15
TABLE: GDP GROWTH FORECASTS
15
TABLE: PRIVATE CONSUMPTION FORECASTS
16
TABLE: GOVERNMENT CONSUMPTION FORECASTS
16
TABLE: FIXED INVESTMENT FORECASTS
16
TABLE: NET EXPORTS FORECASTS
16
Fiscal Policy And Public Debt Outlook
17
Fiscal Expansion Bodes Well For Power Sector
17
Structural Fiscal Position
18
TABLE: CENTRAL GOVERNMENT REVENUES AND EXPENDITURE, 2014
19
External Trade And Investment Outlook
20
Falling Grants And Aid, Current Deficit Account Narrowing
20
Outlook On External Position
21
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
22
Monetary Policy
23
Following The Fed's Monetary Tightening With A Lag
23
TABLE: BREAKDOWN OF IMPORTS IN 2014
23
TABLE: BREAKDOWN OF EXPORTS IN 2014
23
Monetary Policy Framework
24
Chapter 1
27
The Jordanian Economy To 2025
27
Expanding Private Sector Offers Strong Potential
27
TABLE: LONG-TERM MACROECONOMIC FORECASTS
27
Chapter 1
29
SWOT Analysis
29
Domestic Politics
30
Refugee Crisis To Impact Stability, Not Fiscal Outlook
30
TABLE: POLITICAL OVERVIEW
30
Long-Term Political Outlook
32
Further Reforms On The Horizon-
32
Chapter 1
35
SWOT Analysis
35
Executive Summary - West Bank & Gaza
37
Core Views
37
Key Risks
37
Chapter 2
39
SWOT Analysis
39
Economic Growth Outlook
40
Moribund Economic Outlook Amidst Strong Constraints
40
GDP By Expenditure Outlook
41
TABLE: GDP GROWTH FORECASTS
41
TABLE: COMPONENTS OF GDP (% OF TOTAL)
42
TABLE: GOVERNMENT CONSUMPTION FORECASTS
42
TABLE: FIXED INVESTMENT FORECASTS
42
TABLE: NET EXPORTS FORECASTS
42
Chapter 2
45
The West Bank & Gaza Economy To 2025
45
Long-Term Growth Outlook Far Below Potential
45
TABLE: LONG-TERM MACROECONOMIC FORECASTS
45
Chapter 2
49
SWOT Analysis
49
Domestic Politics
50
Peace Process Stranded Until At Least 2017
50
Long-Term Political Outlook
51
Monumental Obstacles To Statehood
51
Chapter 3: BMI Global Macro Outlook
55
Global Macro Outlook
55
Tail Risks Mounting Amid Sub-Par Growth
55
TABLE: GLOBAL ASSUMPTIONS
55
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
56
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
56
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
57
TABLE: JORDAN - MACROECONOMIC DATA & FORECASTS
59
TABLE: WEST BANK AND GAZA - MACROECONOMIC DATA & FORECASTS
59

Assess your risk exposure in Jordan, West Bank and Gaza with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Jordan, West Bank and Gaza with confidence.

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