Jordan's political risk profile remains intrinsically connected to the region's security outlook. Threats to the country's stability will remain elevated as long as the fighting in Syria and Iraq continues. Domestically, high youth unemployment and the government's uncompromising approach towards the Jordanian Islamist opposition raise longer-term risks, with this trend exacerbated by the large influx of Syrian refugees in the country.
The reopening of the Iraqi border will benefit Jordanian exporters and support economic growth.
Jordan's twin deficits - in the budget and current accounts - will narrow over the coming years, to 3.0% and -7.4% of GDP respectively in 2018. The EU offering an enhanced trade agreement, lower oil prices, progress towards energy diversification, and government efforts to increase revenues will drive these improvements.
Given the very slow progress made by the Iraqi Defence Forces and the Syrian army in Iraq and Syria against radical jihadist group Islamic State (IS) and other opposition movements, the security risks confronting Jordan are set to remain prominent over the coming years.
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.
|Real GDP growth, % y-o-y||3.1||2.4||2.5||3.0|
|Nominal GDP, USDbn||36.0||37.3||39.6||42.1|
|Consumer price inflation, % y-o-y, eop||1.7||-1.6||2.5||3.0|
|Exchange rate JOD/USD, eop||0.71||0.71||0.71||0.71|
|Budget balance, % of GDP||-2.3||-3.5||-3.7||-3.3|
|Current account balance, % of GDP||-6.8||-9.3||-8.0||-7.5|
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