Through the disciplined application of sound economic policies, Jordan in 1995 surpassed most of the target goals of its economic reform package. The following is a comparison between the actual performance of the Jordanian economy and the envisaged targets agreed upon with the IMF in 1995.
The Jordanian market has been expanding vigorously, in response to the restructuring and market reform efforts. In the first half of the nineties, Jordan achieved an average yearly growth rate of 6.6%, the highest in the region. Likewise, the stock of investment has been growing steadily from 22% of the GDP in 1989 to 33.4% of the GDP in 1996, with the private sector accounting for 80% of the aggregate investment.
The current account deficit has been reduced from 24% in 1988 to less than 4% of GDP by the end of 1996. Recently, the balance of trade deficit decreased by over US$ 220 million, or 13.3%, to US$ 1,420 million, as exports increased by US$ 71 million and imports decreased by US$ 150 million in the first eight months of 1997.
The budget deficit also decreased from 10% in 1989 to less than 4% of GDP in 1996, and there are signs that it will decrease further in 1997. External debt, which stood at 190% of GDP in 1989, decreased to less than 100% of GDP in 1996. Moreover, Jordan's prudent monetary policy has made the Dinar one of the most stable currencies in the region, as Jordan's foreign currency reserves increased to US$ 1.1 billion in 1997. The inflation rate was reduced from 25.6% in 1989 to 6.5% in 1996. Against the background of exports growing at 8.2%, workers' remittances increasing by 16%, tourism income rising at 6% and foreign investment expanding by US$ 70 million during the first four months in 1997 and the overall success of the reform programs, Jordan can look forward to a prosperous future.