Jordan and the West Bank & Gaza Country Risk Report

Published 23 June 2015 | Quarterly

  • 54 pages
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$1,195.00
Jordan and the West Bank & Gaza Country Risk Report

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.

  • Rising tensions between Israel and the Palestinian authorities highlight the West Bank and Gaza's deteriorating political environment. 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.

  • We expect only a subpar economic recovery across the Palestinian territories this year, after a 0.4% contraction in real GDP in 2014. The pace of reconstruction of the Gaza Strip will remain slow, while fiscal constraints and political uncertainty limit the West Bank's growth potential.

  • 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 Authority, will hinder any progress in negotiations.

Key Risks To Outlook

  • 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 2013-2016)
Indicator 2013 2014 2015f 2016f
National Sources/BMI
Real GDP growth, % y-o-y 2.2 -0.4 3.4 4.4
Nominal GDP, USDbn 12.5 12.8 13.6 14.7
Consumer price inflation, % y-o-y, eop 2.7

Table of Contents

Executive Summary - Jordan
11
Core Views
11
Key Risks To Outlook
11
Chapter 1
13
SWOT Analysis
13
Domestic Politics
14
Monarchy Secure Despite Multitude Of Threats
14
TABLE: Jorda n - POLITICAL OVERVIEW
14
Long-Term Political Outlook
16
Further Reforms On The Horizon-
16
Chapter 1
19
SWOT Analysis
19
Economic Activity
20
Economy On Its Way To Recovery
20
TABLE: Jorda n - Economic Activit y
20
Monetary Policy
23
Room For Another Rate Cut
23
TABLE: Jorda n - Moneta ry Polic y
23
Banking Sector
25
Modest Uptick In Lending Over 2015
25
Chapter 1
27
The Jordanian Economy To 2024
27
Exports Driving Long-Term Growth
27
TABLE: Jorda n - Long-Term Mac roec onomic Forecasts
27
Executive Summary - West Bank & Gaza
29
Core Views
29
Key Risk To Outlook
29
Chapter 2
31
SWOT Analysis
31
Domestic Politics
32
Palestinian Political System Increasingly At Risk Of Collapse
32
Long-Term Political Outlook
33
Monumental Obstacles To Statehood
33
Chapter 2
37
SWOT Analysis
37
Economic Activity
38
Numerous Headwinds Will Stifle Growth
38
TABLE: West Bank & Gaza - Economic Activit y
38
Chapter 2
41
The West Bank & Gaza Economy To 2024
41
Long-Term Growth Outlook Far Below Potential
41
TABLE: West Bank & Gaza - Long-Term Mac roec onomic Forecasts
41
Chapter 3: BMI Global Macro Outlook
45
Global Outlook
45
Deflationary Pressure
45
Table : Global Assu mpti ons
45
Table : Devel oped States , Real GDP Growt H, %
46
Table : BMI VERSUS BLOOM BERG CON SENSUS REAL GDP GRO WTH FOR ECASTS, %
46
Table : Emergi ng Ma rkets , Real GDP Growth , %
47

The Jordan and the West Bank & Gaza Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Jordan, West Bank and Gaza. It 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-2019, just published by award-winning forecasters, BMI Research.

Key Uses

  • Forecast the pace and stability of Jordan, West Bank and Gaza's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating 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 Index 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 Country Risk Report by BMI Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Jordan, West Bank and Gaza' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Jordan, West Bank and Gaza through end-2019 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 Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, 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 Index 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 obligations).
  • Global Assumptions - forecasts for each year to end-2019 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 Index evaluates 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 Index assesses explicit short- and long-term risks to political stability; latest positioning 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.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Jordan, West Bank and Gaza’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

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.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Jordan, West Bank and Gaza?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Jordan, West Bank and Gaza against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Jordan, West Bank and Gaza’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

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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