Egypt upheaval hits Jordan’s trade

Upheaval in Egypt hit Jordan’s trade deficit last year, helping it widen by 21 percent to 7.3 billion dinars ($10.3 billion) by cutting off cheap gas supplies, official data showed. Department of Statistics (DOS) data showed a sharp rise in the oil import bill pushed up the cost of imports by 17.6 percent to 12.9 billion dinars. Egypt’s revolution and ensuing instability led to a rupture in gas supplies used for electricity generation and forced Amman to import more expensive energy from elsewhere. The pipeline that carries Egyptian gas to Jordan and Israel has been blown up to 12 times since the start of the Egyptian uprising last year. Jordan’s overall energy bill in 2011 soared by 58 percent to 3.46 billion dinars in 2011, the data obtained by Reuters showed. A chronic trade deficit and spiraling budget deficit have for years been among the biggest concerns for Jordanian economic policymakers. The current account deficit has traditionally been covered by strong foreign direct investments and portfolio inflows, including remittances from tens of thousands of Jordanians living abroad, mainly in the Gulf Arab region. The kingdom’s exports reached 5.645 billion dinars in 2011, up 13.3 percent from the previous year, boosted by improved prices of fertilizers and potash the country exports to long-term Asian suppliers. The export figure includes re-exports to neighboring countries, which also rose 13 percent. Among Jordan’s main hard currency earners are garments sold to US markets under a free trade deal which recovered last year after having been hit by a slump in US consumption. Figures showed exports to the US market rose 11.9 percent to 733 million dinars in 2011 against the previous year. Iraq, the kingdom’s second major export market after the US for a wide range of agricultural and industrial goods, witnessed a 15 percent rise in 2011 to 715 million dinars. But Jordan’s economic growth rate dropped to around 2.3 percent last year against an average annual rate of around 7 percent in the last decade as regional uncertainty hit remittances and investments while domestic demand slumped. Officials say the outlook so far in 2012 does not signal any pickup in economic activity, with continued regional unrest pushing many investors on to the sidelines. The International Monetary Fund forecast earlier this month that higher oil imports will push the fiscal deficit higher and generate real growth rate of 2.75 percent this year.