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Monetary & Economic Developments in Jordan - November 2016

IM Research
By IM Research
7 years ago
Monetary & Economic Developments in Jordan - November 2016

Ard, Arif, Dinar, Mal, Reserves, Sales

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  1.                 Recent Monetary & Economic   Developments in Jordan           Central Bank of Jordan   Research Dept / Monthly Report November, 2016 
  2.   Central Bank of Jordan Tel: (962 6) 4630301 Fax: (962 6) 4638889 / 4639730  P.O. Box 37Amman11118Jordan Website: http://www.cbj.gov.jo E-mail redp@cbj.gov.jo
  3.    OUR VISION To be one of the most capable central banks regionally and internationally in maintaining monetary stability and ensuring the soundness of the financial system thereby contributing to sustained economic growth in the Kingdom. OUR MISSION Ensuring monetary and financial stability by maintaining price stability, protecting the value of the Jordanian Dinar and through an interest rate structure consistent with the level of economic activity thereby contributing toward an attractive investment environment and a sound macroeconomic environment. Furthermore, the Central Bank of Jordan strives to ensure the safety and soundness of the banking system and the resilience of the national payments system. To this end, the Central Bank of Jordan adopts and implements effective monetary and financial policies and employs its human, technological, and financial recourses in an optimal manner in order to effectively achieve its objectives. OUR VALUES Loyalty : Commitment and dedication to the institution, its staff and clients. Integrity : Seeking to achieve our organizational goals honestly and objectively. Excellence : Seeking to continuously improve our performance and deliver our services in accordance with international standards. Continuous Learning : Aspiring to continuously improve practical and academic skills to maintain a level of excellence in accordance with international best practices. Teamwork : Working together, on all levels of management, to achieve our national and organizational goals with a collective spirit of commitment. Transparency : Dissemination of information and knowledge, and the simplification of procedures and regulations in a comprehensible and professional manner. 
  5. Contents   Executive Summary    Fourth    Employment     15     23     35   Public Finance    External Sector  3   Output, Prices and Third     Sector Second   1 Monetary & Financial  First   
  7. Central Bank of Jordan Monthly Report   Executive Summary  Output, Prices and Employment During the first half of 2016, real GDP at market prices, grew by 2.1 percent, against 2.2 percent during the same period of 2015. The Consumer Price Index continued its contraction by 1.1 percent during the first ten months of 2016, against a contraction of 0.7 percent during the same period of 2015. Furthermore, the unemployment rate increased during the third quarter of 2016 to stand at 15.9 percent compared to 13.8 percent during the same quarter in 2015.  Monetary and Financial Sector      The CBJ’s foreign currency reserves amounted to US$ 12,062.6 at the end of October 2016. This level of reserves covers around 6.7 months of the kingdom's import of goods and services. Domestic liquidity increased by JD 892.3 million (2.8 percent) at the end of October 2016, compared to its level at the end of 2015, to stand at JD 32,497.8 million. The outstanding balance of credit facilities extended by licensed banks increased by JD 1,395.5 million (6.6 percent) at the end of October 2016, compared to its level at the end of 2015, to stand at JD 22,499.0 million. Total deposits at licensed banks increased by JD 251.6 million (0.8 percent) at the end of October 2016, compared to its level at the end of 2015, to stand at JD 32,850.1 million. This increase was a result of the increase in foreign currency by JD 263.0 million (4.0 percent) and the decrease in the JD deposits by JD 11.4 million (0.04 percent). The Share Price Index (SPI) weighted by the market capitalization of free float shares at Amman Stock Exchange (ASE) reached 2,107.6 points at the end of October 2016, decreasing by 28.7 points, or 1.3 percent, compared to its level at the end of 2015.  1
  8. Executive Summary November 2016  Public Finance: During the first ten months of 2016, the general budget, including foreign grants, recorded a fiscal deficit in the amount of JD 672.2 million compared to a fiscal deficit in the amount of JD 834.7 million during the same period of 2015. Gross outstanding domestic debt (budgetary and own-budget) increased by JD 1,068.0 million at the end of October 2016, compared to its level at the end of 2015, to stand at JD 16,554.0 million (60.2 percent of GDP). while outstanding external public debt decreased by JD 95.3 million at the end of October 2016 compared to its level at the end of 2015 to reach JD 9,295.2 million, (33.8 percent of GDP). Accordingly, the gross public debt (domestic and external) stood at 94.0 percent of GDP at the end of October 2016 compared to 93.4 percent of GDP at the end of 2015.  External Sector: Total merchandize exports (domestic exports plus re-exports) decreased by 4.0 percent to reach JD 3,998.0 similarly, merchandize imports decreased by 8.1 percent to reach JD 10,044.3 million during the first nine months of 2016. As a result, the trade balance deficit decreased by 10.7 percent compared to the same period of 2015, to reach JD 6,046.3 million. The preliminary data for the first ten months of 2016 showed a decrease in travel receipts by 1.8 percent and an increase in travel payments by 8.3 percent compared to the same period of 2015. Moreover, total workers’ remittances receipts decreased by 3.7 percent during the first ten months of 2016 compared to the same period of 2015. The balance of payments for the first half of 2016 displayed a deficit in the current account amounting to JD 1,634.8 million, (12.7 percent of GDP) up from JD 1,176.3 million (9.5 percent of GDP) during the first half of 2015, while the current account deficit excluding grants increased to reach 14.5 percent of GDP compared with 11.6 percent of GDP during the first half of 2015. Moreover, net direct investment recorded an inflow of JD 533.4 million during the first half of 2016 compared to a net inflow of JD 449.3 million during the first half of 2015, furthermore, the international investment position (IIP) registered a net obligation to abroad in an amount of JD 25,929.8 million at end of June 2016 compared to JD 24,414.9 million at the end of 2015. 2  
  9. Central Bank of Jordan Monthly Report   First: Monetary and Financial Sector  Summary  The CBJ's foreign currency reserves amounted to US $ 12,062.6 million at the end of October 2016. This level of reserves covers around 6.7 months of the kingdom's imports of goods and services.  Domestic liquidity increased by JD 892.3 million (2.8 percent) at the end of the first ten months of 2016, compared to its level at the end of 2015, to total JD 32,497.8 million.  The outstanding balance of credit facilities extended by licensed banks increased by JD 1,395.5 million (6.6 percent) at the end of the first ten months of 2016, compared to its level at the end of 2015, to reach JD 22,499.0 million.  Total deposits at licensed banks increased by JD 251.6 million (0.8 percent) at the end of the first ten months of 2016, compared to its level at the end of 2015, to stand at JD 32,850.1 million.  The interest rates on all types of deposits and credit facilities, except discounted bills & bonds, decreased at the end of 2016 compared to their levels at the end of 2015.  3
  10. Monetary and Financial Sector November 2016  The Share Price Index (SPI) weighted by market capitalization of free float shares at Amman Stock Exchange (ASE) reached 2,107.6 points at the end of October 2016, decreasing by 28.7 points (1.3 percent), compared to its level at the end of 2015. Moreover, the market capitalization decreased by JD 1,246.8 million (6.9 percent), compared to its registered level in 2015, to stand at JD 16,737.9 million. Main Monetary Indicators JD Million, and Percentage Change Relative to the Previous Year   End of October 2015 US$ 14,153.5 0.5 2015  CBJ’s Foreign Currency Reserves*  31,605.5 8.1  21,103.5 9.5  18,098.1 4.6  32,598.5 7.7  US$ 14,966.4 2016 US$ 12,062.6 6.3 -14.8 Money Supply (M2) 31,328.6 7.1 32,497.8 2.8 Credit Facilities, of which: 21,014.4 9.0 22,499.0 6.6 17,991.7 4.0 19,534.9 7.9 32,379.7 7.0 32,850.1 0.8  Private Sector (Resident) Total Deposits, of which: 26,014.5 8.3  In JD 26,016.7 8.3 26,003.1 -0.04 6,584.0 5.4  In Foreign Currencies 6,363.0 1.8 6,847.0 4.0 25,400.3 26,580.9  Deposits of Private Sector (Resident), of which: 25,799.7 7.6 21,163.1 8.1 4,636.7 5.3   In JD  In Foreign Currencies  5.9 3.0 20,909.3 6.8 21,603.4 2.1 4,491.1 2.0 4,977.5 7.4 * Except gold reserves and special drawing rights. Source: Central Bank of Jordan / Monthly Statistical Bulletin. 4  
  11. Central Bank of Jordan Monthly Report    CBJ's Foreign Currency Reserves This level of reserves covers 9.4 around 6.7 months of the 7.4 kingdom's imports of goods 5.4 and services. 09/2016 10/2016 11.4 07/2016 08/2016 the end of October 2016. 05/2016 06/2016 13.4 03/2016 04/2016 to US $ 12,062.6 million at 01/2016 02/2016 15.4 11/2015 12/2015 currency reserves amounted 9/2015 10/2015 CBJ's Foreign Exchange Reserves (US $ Billion) 2013 2014 foreign 2011 2012 CBJ's 2008 2009 2010 The  Domestic Liquidity (M2)  Domestic liquidity totaled JD 32,497.8 million at the end of October 2016, increasing by JD 892.2 million, or 2.8 percent, compared to an increase of JD 2,088.2 million, or 7.1 percent, during the same period in 2015.  Developments in the components and the factors affecting domestic liquidity at the end of the first ten months of 2016 compared to their levels at the end of 2015, reveal the following:  Components of Domestic Liquidity - Deposits increased by JD 614.9 million, or 2.2 percent, at the end the first ten months of 2016, compared to their level at the end of 2015, to total JD 28,287.3 million, compared to an increase of JD 1,887.2 million, or 7.4 percent, during the same period in 2015.  5
  12. Monetary and Financial Sector November 2016 - Currency in circulation Relative Importance of Domestic Liquidity Components , October 2016 increased by JD 277.4 million, or 7.1 Currency in circulation percent, at the end Time and 13.0% Saving of October 2016, Deposits 60.0% compared to its level at the end of 2015, to reach JD 4,210.6 Demand Deposits million, against an 27.0% increase of JD 200.9 million, or 5.3 percent, during the same period in 2015.  Factors Affecting Domestic Liquidity - Net domestic assets of Factors Affecting Domestic Liquidity JD Million the banking system 4000.0 increased by JD 3000.0 1,459.6 million, or 2000.0 1000.0 6.2 percent, at the 0.0 end of October 2016, -1000.0 -2000.0 compared to its level -3000.0 2009 2010 2011 2012 2013 2014 2015 Oct. at the end of 2015, 2016 Change In Net Domestic Assets against an increase of Change In Net Foreign Assets Change In Domestic Liquidity JD 1,920.2 million, or 9.0 percent, during the same period in 2015. This increase was a result of the increase in net domestic assets at the CBJ by JD 1,317.3 million, or 22.8 percent, and its increase at licensed banks by JD 142.2 million, or 0.5 percent. 6  
  13. Central Bank of Jordan Monthly Report   - Net foreign assets of the banking system decreased by JD 567.3 million, or 7.0 percent, at the end of the first ten months of 2016, compared to their level at the end of 2015, against an increase in the amount of JD 168.0 million, or 2.1 percent, during the same period in 2015. This increase was a result of the decrease in net foreign assets at the CBJ by JD 997.1 million, or 9.8 percent, and the increase of net foreign assets at licensed banks by JD 429.8 million or 21.6 percent. Factors Affecting DomesticLiquidity (M2) JD Million     End of October  2015 2015 8,137.3   Foreign Assets (Net) 8,100.3 2016 7,570.0 10,124.2 CBJ 10,652.4 9,127.1 -1,986.9 Licensed Banks -2,552.1 -1,557.1 23,228.3 24,927.8 23,468.2 -5,781.8  Domestic Assets (Net) CBJ, of which: -6,249.5 -4,464.5 1,519.1 Claims on Public Sector (Net) 1,531.8 1,566.2 -7,324.1 Other Items (Net*) -7,804.5 -6,053.6 29,477.8 29,392.4 10,246.6 10,623.3 18,566.6 20,198.6 664.6 -1,429.5 29,250.2 10,220.9 18,681.3 348.0 31,605.5 Licensed Banks Claims on Public Sector (Net)  Claims on Private Sector Other Items (Net) Money Supply (M2) 31,328.6 32,497.8 3,933.2 Currency in Circulation 4,005.3 4,210.6 27,672.3 Total Deposits, of which: 27,323.3 28,287.2 4,709.6  In Foreign Currencies 4,544.1 5,023.9 * This item includes Certificates of Deposit in Jordanian Dinar. Source: Central Bank of Jordan / Monthly Statistical Bulletin.  7
  14. Monetary and Financial Sector  November 2016  Interest Rate Structure  Interest Rates on Monetary Policy Instruments th  On July 9 , 2015, the CBJ lowered the interest rates on monetary policy tools by 25 basis points, to become as follows: Interest Rates on Monetary Policy Instruments, percentage points   3.75  October 2015 2015  2016 3.75  3.75 3.50 Repurchase Agreements  Rate (overnight) 3.50 3.50 1.50 Overnight Deposit Window  Rate 1.50 1.50 Re-discount Rate 2.50 Repurchase Agreements rate (one week) 2.50 2.50 2.50 Repurchase Agreements rate (one month) 2.50  2.50  CBJ main interest 2.25 2.25 Rate: 2.5 percent. Source: Central Bank of Jordan / Monthly Statistical Bulletin.  Re-Discount Rate: 3.75 percent.  Interest Rate on Overnight Repurchase Agreements: 3.50 percent.  Overnight Deposit Window Rate: 1.50 percent.  Weekly/ Monthly Repurchase Agreements: 2.50 percent. Certificates of Deposits (one week)  The interest rate margin on CDs was brought down to 2.25 – 2.50 percent.  This decision aims at stimulating credit and reducing its cost, in addition to encouraging consumption and investment, thus fostering economic growth. The decision came in light of the continuous monitoring of domestic and international developments, and backed with the slowdown in economic growth as well as declining inflation.  Interest Rates in the Banking Sector  Interest Rates on Deposits  Time Deposits: The weighted average interest rate on time deposits at the end of October 2016 maintained the same level registered in the previous month to stand at 3.00 percent. This rate is lower by 8 basis points than its level at the end of 2015. 8 
  15. Central Bank of Jordan Monthly Report   10/2016 7/2016 4/2016 1/2016 10/2015 7/2015 4/2015 1/2015 10/2014  Saving Deposits: The Interest Rates on Deposits weighted average October 2014- October 2016, Percentage Point interest rate on 4.8 saving deposits at the 4.0 Time Deposits end of October 2016 3.2 decreased by 2 basis points, compared to its 2.4 level registered in the 1.6 Saving Deposits previous month to 0.8 stand at 0.56 percent, 0.0 which is 6 basis points lower than its level registered at the end of 2015.  Demand Deposits: The weighted average interest rate on demand deposits at the end of October 2016 maintained the same level registered in the previous months to stand at 0.24 percent. This rate is lower by 8 basis points than its level registered at the end of 2015.  Interest Rates on Credit Facilities Interest Rates on Credit Facilities October 2014- October 2016, Percentage Point 9.6 9.3 9.0 Loans and Advances 8.7 8.4 8.1 Overdraft  10/2016 7/2016 4/2016 1/2016 10/2015 7/2015 4/2015 7.5 1/2015 7.8 10/2014  Overdraft Accounts: The weighted average interest rate on overdraft accounts at the end of October 2016 decreased by 11 basis points compared to its level in the previous month to stand at 7.65 percent, this rate is lower by 36 basis points than its level registered at the end of 2015. 9
  16. Monetary and Financial Sector November 2016  Discounted Bills and Rates on Deposits and Credit Facilities Bonds: The weighted Interest at Licensed Banks, percentage points average interest rate Change Relative to on “discounted bills October the Preceding  Year and bonds” at the 2015 2015 2016 Basis Points end of October 2016, decreased by 19 basis  Deposits points compared to its 0.33 0.24 -8 0.32 Demand level in the previous 0.64 0.56 -6 0.62 Saving 3.16 3.00 -6 3.06 Time month to stand at   Credit Facilities 10.44 percent. This Bills rate is higher by 174 9.34 10.44 174 8.70  Discounted and Bonds basis points than its and 8.29 8.05 -19 8.24 Loans Advances level at the end of 8.02 7.65 -36 8.01  Overdraft 2015. Prime Lending 8.37 8.39 2 8.37 Rate  Loans and Advances: Central Bank of Jordan / Monthly Statistical The weighted average Source: Bulletin.  interest rate on “loans and advances” at the end of October 2016 increased by 6 basis points compared to its level in the previous month, to stand at 8.05 percent. This rate is lower by 19 basis points than its level registered at the end of 2015.  The prime lending rate stood at 8.39 percent at the end of October 2016, this rate is higher by 2 basis points than its level registered at the end of 2015.  As a result, the interest rate margin, which is the difference between interest rates on loans and advances and those on time deposits, reached 505 basis points at the end of October 2016, which is lower by 13 basis points than its level registered at the end of 2015.  Credit Facilities Extended by Licensed Banks  Total credit facilities extended by licensed banks increased by JD 1,395.5 million, or 6.6 percent, at the end of the first ten months of 2016, compared to its level at the end of 2015, against an increase of JD 1,739.9 million, or 9.0 percent during the same period in 2015. 10  
  17. Central Bank of Jordan Monthly Report    The extended credit facilities, according to economic activity, at the end of the first ten months of 2016 demonstrates an increase in the credit extended to the "construction" sector by JD 561.7 million, or 11.5 percent, followed by "others" item which generally represents facilities extended to individuals, by JD 298.7 million, or 5.8 percent, and "the public services and utilities" and "The mining" sectors by JD 142.9 million, or 4.4 percent, and 84.2 million, or 49.5 percent, respectively, compared to their levels at the end of 2015.  In terms of borrowers, credit facilities at the end of October 2016 had shown an increase in credit extended to the private sector (resident) by 1,436.8 million, or 7.9 percent, the public institutions by JD 41.3 million, or 12.7 percent, and the financial institutions by JD 9.0 million. Meanwhile, credit facilities extended to the central government declined by JD 78.3 million, or 3.6 percent, and the private sector (non-resident) by JD 13.3 million, or 2.8 percent, compared to their levels at the end of 2015.  Deposits at Licensed Banks  Total deposits at licensed banks stood at JD 32,850.1 million at the end of the first ten months of 2016, increasing by JD 251.6 million, or 0.8 percent, compared to its level at the end of 2015, against an increase of JD 2,118.7 million, or 7.0 percent, during the same period in 2015.  This increase was a result of the increase in the deposits of the private sector (resident) by JD 781.2 million, or 3.0 percent, and the decrease in the deposits of the private sector (non-resident) by JD 294.6 million, or 8.1 percent, the public sector (central government plus public institutions) by JD 157.2 million, or 5.8  11
  18. Monetary and Financial Sector November 2016 percent , and the non-banking financial institutions by JD 77.8 million, or 17.6 percent.  The currency composition of deposits at the end of the first ten months of 2016 revealed that “deposits in the foreign currency” increased by JD 263.0 million, or 4.0 percent, while JD deposits decreased by JD 11.4 million, or 0.04 percent, compared to their levels at the end of 2015.  Amman Stock Exchange (ASE) Indicators of ASE displayed a mixed performance at the end of the ten months of 2016 compared to 2015. This can be demonstrated as follows:  Trading Volume Trading volume at ASE totaled JD 176.1 million in October 2016; up by JD 37.4 million, or 27.0 percent, compared to its level in the previous month, against an increase of JD 20.5 million, or 10.1 percent, during the same month in 2015. As for the first ten months of 2016, the trading volume decreased by JD 830.2 million, or 31.6 percent, compared to the same period in 2015, to reach JD 1,798.6 million.  Traded Shares The number of traded shares in October 2016 totaled 132.3 million shares; down by 0.7 million shares, or 0.5 percent, compared to its level in the previous month, against an increase amounting to 15.9 million shares, or 9.7 percent, during the same month in 2015. As for the first ten months of 2016, the number of traded shares decreased by 632.8 million shares, or 28.4 percent, amounting to 1,591.7 million shares, compared to 2,224.5 million shares traded during the same period in 2015. 12  
  19. Central Bank of Jordan Monthly Report    Share Price Index (SPI) Share Price Index Weighted by Market The SPI weighted by Capitalization of Free Float Shares, by Sector October market capitalization of free 2015 2015  2016 float shares at ASE 2,136.3  General Index 2,034.4 2,107.6 2,906.2 2,797.9 2,865.4 Financial Sector decreased by 12.9 points, or 1,848.8  Industrial Sector 1,780.2 1,923.7 0.6 percent, at the end of 1,726.7 1,607.4 1,613.2 Services Sector October 2016 compared to Source: Amman Stock Exchange. its level in the previous month to stand at 2,107.6 point, against a decrease of 10.8 points, or 0.5 percent, during the same month in 2015. Furthermore, the SPI decreased by 28.7 points, or 1.3 percent, at the end of the first ten months of 2016 compared to its level at the end of 2015, against a decrease in the amount of 131.1 points, or 6.1 percent, during the same period in 2015. The aforementioned decrease was an outcome of the decrease in the SPI of the services sector by 113.6 points, or 6.6 percent, and the financial sector by 40.8 points or 1.4 percent. Meanwhile, the SPI for the industrial sector increased by 74.8 points, or 4.1 percent, compared to their levels at the end of 2015.  Market Capitalization The ASE's market capitalization totaled JD 16.7 billion at the end of October 2016; increasing by JD 75.8 million, or 0.5 percent, compared to its level in the previous month, against a decrease of JD 115.9 million, or 0.7 percent, Point 2200.0 The General Share Price Index and The Market Capitalization October 2015 - October 2016 JD Billion General Price Index 18.5 2150.0 18.0 2100.0 2050.0 17.5 2000.0 1950.0 1900.0 17.0 Market Capitalization 16.5 1850.0 1800.0 10/2015 01/2016 4/2016 7/2016  16.0 10/2016 13
  20. Monetary and Financial Sector November 2016 during the same month in 2015 . As for the first ten months of 2016, the market capitalization decreased by JD 1,246.8 million, or 6.9 percent, compared to a decrease of JD 946.0 million or 5.2 percent, during the same period in 2015.   Non-Jordanian Net Investment Non-Jordanian net investment at ASE recorded Main Amman Stock Exchange Trading Indicators, JD Million  an inflow amounting to JD October 2015 23.9 million in October 2016, compared to Value Traded 222.6 176.1 13.9 Average Daily Trading 11.1 8.4 17,984.7 Market Capitalization 17,136.6 16,737.9 2,585.8 No. of Traded Shares (million) 180.4 132.3 10.6 Net Investment of NonJordanian -4.6 23.9 981.7 NonJordanian Buying 48.6 65.7 971.1 NonJordanian Selling  53.2 41.9 during the same month in 2015; the value of shares by non- Jordanian in October 2016 amounted to JD 65.7 million, while their selling amounted to JD 41.9 2016 3,417.1 an outflow of JD 4.6 million acquired 2015 Source: Amman Stock Exchange.   million. As for the first ten months of 2016, non-Jordanian net investment recorded an inflow amounted JD 143.7 million, compared to an outflow of JD 9.0 million, during the same period in 2015. 14  
  21. Central Bank of Jordan Monthly Report   Second: Output, Prices and Employment  Summary  Gross Domestic Product (GDP), at constant market prices, grew by 1.9 percent during the second quarter of 2016, against 2.4 percent during the same quarter of 2015. At current market prices, GDP grew by 3.2 percent during the second quarter of 2016, compared to 4.5 percent during the same quarter of 2015.  Accordingly, GDP at constant market prices grew by 2.1 percent during the first half of 2016, against 2.2 percent during the same half of 2015. At current market prices, GDP grew by 3.5 percent during the first half of 2016, compared to 4.8 percent during the same half of 2015   The Consumer Price Index (CPI) continued its contraction by 1.1 percent during the first ten months of 2016, against a contraction of 0.7 percent during the same period of 2015. The unemployment rate increased during the third quarter of 2016 to stand at 15.9 percent (13.8 percent for males and 25.2 percent for females), compared to 13.8 percent (11.1 percent for males and 25.1 percent for females) during the same quarter of 2015. The unemployment rate among academic degree holders (Bachelor and higher) reached 22.4 percent.  Developments of GDP  Despite the deepening of the political and social unrest in the region, particularly; in Syria and Iraq, that have strongly influenced the performance of many economic sectors; the real GDP grew by 2.1 percent during the first half of 2016 compared to 2.2 percent during the same period of 2015. When excluding “net taxes on products”, which grew by 1.3 percent, GDP at constant basic prices grew by 2.3 percent during the first half of 2016, compared to the same percent during the first half of 2015.  15
  22. November 2016  Output and Prices Quarterly Growth Rates of GDP at Market Prices 2014 - 2016  Percentages  Q 1  Q2  Q3  Q4  Year GDP at Constant Market Prices 3.2 2.8 3.1 3.3 3.1 GDP at Current Market Prices 7.1 6.1 6.2 7.2 6.6 GDP at Constant Market Prices 2.0 2.4 2.6 2.6 2.4 GDP at Current Market Prices 5.1 4.5 4.7 4.6 4.7 GDP at Constant Market Prices 2.3 1.9 - - - GDP at Current Market Prices 3.8 3.2 - - - 2014 2015 2016 Source: Department of Statistics. At current market prices, GDP grew by 3.5 percent during the first half of 2016, compared to 4.8 percent during the same period of 2015. This decline in nominal growth is mainly attributed to the slowdown in the general price level, measured by the GDP deflator, which grew by 1.3 percent compared to 2.6 percent during the first half of 2015, as a reflection of the continuous decline of oil prices in the international market which contributed in reducing the inflationary pressures upon the national economy. The main sectors contributed to the economic growth during the first half of 2016 were; “transports, storage and communications” (0.5 percentage point), “electricity and water” (0.3 percentage point), agriculture (0.2 percentage point), and construction (0.1 percentage point). These sectors collectively accounted for 52.4 percent of real GDP growth during the first half of 2016. 16 
  23. Central Bank of Jordan Monthly Report   The economic sectors displayed a wide variation in their performance during the first half of 2016. Some sectors recorded accelerated growth, Quarterly Growth Rates of GDP at Market Prices (2014- 2016), % 9 Current Constant 6 3 such 0 as “electricity agriculture, and “transport, Q1 water”, storage Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 communications”, construction. Gross Domestic Product At Market Prices, Percentages and Meanwhile, Sectors services”, “wholesale and 2015 2016 GDP At Market Prices 2.2 2.1 2.2 2.1 Agriculture, Hunting, Forestry, And Fishing -0.8 6.6 - 0.2 Mining And Quarrying 16.5 -17.9 0.2 -0.3 Manufacturing 1.4 0.8 0.2 0.1 Electricity And Water 3.3 14.1 0.1 0.3 Construction -1.0 1.7 - 0.1 Wholesale And Retail Trade 1.8 1.5 0.1 0.1 Restaurant And Hotels -4.3 -1.2 - - 2.5 3.3 0.4 0.5 5.8 5.3 0.6 0.5 2.2 2.2 0.2 0.2 3.0 3.5 0.1 0.2 1.5 1.4 0.2 0.2 6.3 4.1 - - 0.1 0.1 - - trade” experienced slowdown. On the other hand, hotels”, quarrying” “restaurant and “mining sector Transport, Storage & Communications Finance And Insurance Services and Real Estate Community, Social And Personal Services Producers Of Government Services Producers Of Private Non-Profit Services To Domestic Services Of Households and showed contraction in its performance. First Half 2016 and retail Contribution First Half 2015 manufacturing, and “finance and insurance Q2 2016 2015 Relative change and Q1 Source : Department of Statistics. - :Less than 0.1 percentage point.  17
  24. November 2016  Output and Prices  Microeconomic Indicators The microeconomic indicators displayed divergent performance for the current year. Some indicators recorded a notable growth, such as; Manufacturing production quantity index (2.8 percent) and “Number of passengers through Royal Jordanian” (2.0 percent). However, other indicators showed a contraction, particularly; Cargo through Royal Jordanian (20.6 percent) and Value traded at the real estate market (4.0 percent). The following table displays the performance of the main sectoral indicators. Main Sectoral Indicators*  Percentage Points 2015 Available period 2016 Licensed areas for buildings -17.5 January- September -7.7 -8.8 Manufacturing production quantity index** - -0.7 -0.5 Food products and beverages - -23.1 0.2 45.9 Tobacco products - -18.2 -0.8 -1.7 Refined petroleum products - 35.7 0.3 63.8 Wearing apparel - 0.6 3.4 Non-metallicmineral products - -18.6 -0.6 -10.8 - -3.8 - -6.6 2014 2015 7.2 -12. 5 -1.2 Item 1.6 16.9 0.0 -38.3 1.6 17.6 Chemical products “Mining and quarrying” production quantity index** Extraction of crude petroleum and natural gas Other mining ad quarrying -2.8 -7.9 -1.7 -0.7 September 130.3 - 0.1 - -6.6 Number of passengers through Royal Jordanian -8.6 2.0 Cargo through Royal Jordanian 0.0 -20.6 16.7 -3.5 -0.5 -7.4 Quantities of exported and imported goods shipped through Aqaba port Number of departures -2.0 Value traded at the real estate market 22.4 2.8 -1.0 January-October -5.9 -7.5 -0.6 -4.6 -4.0 * : Computed based on the data from Department of Statistics, Department of land and survey, and Royal Jordanian. ** : - The methodology of computing the manufacturing and "mining and quarrying" production indices has been modified, and so far, there are no available data upon the monthly growth rates for 2015. - Compared to the same month in the previous year. 18 
  25. Central Bank of Jordan Monthly Report   Prices The general measured by price the level, percentage  Annual Bases Inflation Rate For the first ten months of the years (2008-2016), percentages % 16.0 14.4 13.0 change in the Consumer Price Index (CPI), continued its contraction by 1.1 percent during 10.0 7.0 4.7 4.4 4.2 5.2 4.0 3.1 1.0 the first ten months of 2016, compared with a contraction of 0.7 percent during the same period of 2015. This came as a -2.0 2008 -1.0 2010 2012 Inflation Rate during the first three quarters for the Year 2015 - 2016 Expenditure Groups Relative Imp. result of the continuous falling in the prices of food and oil in the global markets and its impact on domestic prices. The main groups and items that witnessed decline in their prices are transportation (5.6 percent),“fuels and lighting” (5.5 percent), and “meat and poultry” percent). (9.9 collectively contributed They in reducing the overall inflation rate by 1.7 percentage points. -0.7 -1.1 2016 2014 Relative change Jan – Oct. Contribution Jan – Oct. 2015 2016 2015 2016 -1.1 -0.7 -1.1 All Items 100.0 -0.7 1) Food and nonAlcoholic Beverages, of which: 33.4 1.4 -3.3 0.5 -1.1 Meat and Poultry 8.2 1.2 -9.9 0.1 -0.8 Dairy Products and Eggs 4.2 0.2 -2.2 0.0 -0.1 Vegetables and Legumes Dry and Canned 3.9 1.5 -4.0 0.1 -0.1 2.7 6.3 -2.7 0.2 -0.1 Oils and Fats 1.9 3.7 2.6 0.1 0.0 2) Alcohol and Tobacco and Cigarettes 4.4 3.7 2.9 0.2 0.1 Fruits and Nuts 3) Clothing and footwear 3.5 5.4 2.0 0.2 0.1 4) Housing, of which: 21.9 0.8 0.9 0.2 0.2 Rents 15.6 5.1 2.7 0.8 0.5 Fuels and Lighting 4.8 -12.9 -5.5 -0.7 -0.2 5) Household Furnishings and Equipment 6) Health 4.2 2.0 0.9 0.1 0.0 2.2 3.1 2.5 0.1 0.1 7) Transportation 13.6 -14.4 -5.6 -2.2 -0.7 8) Communication 3.5 0.1 -0.2 0.0 0.0 9) Culture and Recreation 2.3 5.1 3.9 0.1 0.1 10) Education 5.4 3.3 1.6 0.2 0.1 11) Restaurants and Hotels 1.8 1.5 1.3 0.0 0.0 12) Other Goods and Services 3.7 0.9 1.4 0.0 0.1 Source: Department of Statistics.   19
  26. November 2016  Output and Prices In contrast, prices of other Monthly Inflation Rate (October 2015 - October 2016, percentages groups and items showed varied increases, mainly; “culture and recreation” (3.9 percent), clothing % 2.0 1.4 1.5 0.8 1.0 and footwear (2.0 percent), rents 0.5 0.2 0.1 (2.7 percent). 0.0 0.1 0.03 In October 2016, the CPI witnessed an increasing by 0.2 -0.02 -0.5 -0.1 0.04 -0.5 -0.7 -1.0 -0.7 -1.1 -1.5 Sep. percent compared with September Nov. Jan. Mar. May Jul. Sep. 2016. This was due to the increase in the prices of some items, mainly; “Fruits and Nuts” (6.5 percent), transportation (4.1 percent), and the decline in prices of other items such as, “Meat and Poultry” (4.2 percent), and “vegetables and legumes dry and canned” (2.3 percent), and “Dairy Products and Eggs” (1.2 percent).  Employment  The unemployment The unemployment rate by age category during the Third quarter of 2016 rate Unemployment rate increased during the third 50.0 quarter of 2016 to reach 40.0 15.9 percent (13.8 percent 41.0 35.5 Unemployment rate 15.9% 30.0 20.7 20.0 for males and 25.2 percent for females), compared to 13.8 percent (11.1 percent 9.8 10.0 5.2 3.3 0.5 0.0 15-19 20-24 25-29 30-39 40-49 50-59 +60 Age category (Year) for males and 25.1 percent for females) during the same period of 2015. 20 
  27. Central Bank of Jordan Monthly Report    The unemployment among youth reached 41.0 percent for the categories of 15-19 years old, and 35.5 percent for those between 20-24 years.  The refined economic participation rate (the ratio of the labor force to the population of 15 years and over) during the third quarter of 2016 reached 36.3 percent (58.8 percent for males and 13.4 percent for females), compared to 37.6 percent (60.5 percent for males and 14.5 percent for females) during the same quarter in 2015.  The employment rate among population of 15 years and older reached 30.5 percent during the third quarter of 2016, compared to 32.4 percent during the same quarter in 2015. The employees in the sector of “public administration, defense, and social security” accounted for 25.6 percent of the total employed, followed by employees in the “wholesale and retail trade” (15.3 percent), education (11.8 percent), and manufacturing (9.4 percent).  21
  28. Output and Prices 22 November 2016 
  29. Central Bank of Jordan Monthly Report   Third : Public Finance  Summary:  The general budget, including foreign grants, recorded a fiscal deficit in the amount of JD 672.2 million during the first ten months of 2016, comparing to a fiscal deficit in the amount of JD 834.7 million during the same period in 2015. When excluding foreign grants (JD 346.0 million), the general budget deficit reaches JD 1,018.2 million compared to a deficit in the amount of JD 1,243.8 million during the same period in 2015.  Gross outstanding domestic public debt increased by JD 1,068.0 million at the end of October 2016 compared to its level at the end of 2015, to reach JD 16,554.0 million (60.2 percent of GDP).  Outstanding external public debt (budgetary and guaranteed) went up by JD 95.3 million at the end of October 2016, compared to its level at the end of 2015, to stand at JD 9,295.2 million (33.8 percent of GDP).  As a result, gross outstanding public debt (domestic and external) reached JD 25,849.2 million (94.0 percent of GDP) at the end of October 2016 compared to JD 24,876.5 million (93.4 percent of GDP) at the end of 2015.  The performance of the general budget during the first ten months of 2016 compared to the same period in the preceding year:  Public Revenues Public revenues (including foreign grants) increased by JD 55.1 million, or 11.8 percent, in October 2016 compared to the same month of 2015 to reach JD 520.2 million. As for the first ten months of 2016, these revenues were up by JD 350.2 million, or 6.6 percent, compared to the same period in 2015 to stand at JD 5,643.8 million. This came as an outcome of the increase in domestic revenues by JD 413.3 million, and the decrease in foreign grants by JD 63.1 million.  23
  30. Public Finance November 2016 Main Government Budget Indicators during the first ten months of 2016 : (JD Million and Percentages)  October 2015 2016 Total Revenues and Grants 465.1 520.2 Domestic Revenues, of which: 426.4 Tax Revenues, of which: General Sales Tax Growth Rate Jan. –Oct. Growth Rate 2015 2016 11.8 5,293.6 5,643.8 6.6 477.8 12.1 4,884.5 5,297.8 8.5 314.7 325.8 3.5 3,493.9 3,628.4 3.8 245.8 256.0 4.1 2,308.0 2,386.0 3.4 109.7 150.9 37.6 1,375.5 1,656.4 20.4 38.7 42.4 9.6 409.1 346.0 -15.4 645.0 676.5 4.9 6,128.3 6,316.0 3.1 Capital Expenditures 72.3 88.8 22.8 737.3 691.4 -6.2 Overall Deficit/ Surplus -179.9 -156.3 - -834.7 -672.2 - Other Revenues Foreign Grants Total Expenditures, of which: Source: Ministry of Finance/ General Government Finance Bulletin.  Domestic Revenues Domestic revenues Tax Revenue Structure witnessed an increase by (2011-2015) and the first ten months of 2016, JD Million JD 413.3 million, or 8.5 4500 percent, during the first ten 4000 3500 months of 2016 compared 3000 2500 to the same period in 2015, 2000 1500 to reach JD 5,297.8 1000 million. This increase was 5000 Jan.- Oct. 2011 2012 2013 2014 2015 an outcome of the rise in 2016 Other Taxes Income Tax the proceeds of “tax Taxes on International Trade and Transactions Sales Tax revenues”, and “other revenues”, by JD 134.5 million, JD 280.9 million, respectively, and the drop in pension contribution by JD 2.1 million. 24  
  31. Central Bank of Jordan Monthly Report    Tax Revenues Tax revenues increased by JD 134.5 million, or 3.8 percent, during the first ten months of 2016 compared to the same period in 2015, to reach JD 3,628.4 million (68.5 percent of domestic revenues). Following are the main developments in tax revenues items: - An increase in the proceeds of “general sales tax on goods and services” by JD 78.0 million, or 3.4 percent, which reached JD 2,386.0 million (accounting for 65.8 percent of total tax revenues). This result was driven by the increase in the proceeds of “sales tax on commercial sector”, “sales tax on services”, “sales tax on domestic goods”, and “sales tax on imported goods” by JD 37.1 million, JD 21.7 million, JD 11.2 million, and JD 7.9 million, respectively. - An increase in the proceeds of “income and profit taxes” by JD 79.2 million, or 9.8 percent, which reached JD 883.3 million (accounting for 24.3 percent of total tax revenues). This rise was an outcome of the increase in the proceeds of “income tax from companies and other projects” by JD 91.1 million, and decrease in the proceeds of “income tax from individuals” by JD 11.9 million. Accordingly, income tax from companies accounted for 81.0 percent of total taxes on income and profits to reach JD 715.2 million.  25
  32. Public Finance November 2016 - A decrease in the proceeds of “taxes on international trade and transactions” (including customs duties and fees) by JD 17.3 million or 6.2 percent, to reach JD 262.7 million (accounting for 7.2 percent of total tax revenues). - An increase in real-estates tax (taxes on financial transactions) by JD 5.2 million, or 5.1 percent, to reach JD 96.4 million (accounting for 2.7 percent of total tax revenues).  Other Revenues (Non-Tax Revenues) “Other revenues” increased by JD 280.9 million, or 20.4 percent, during the first ten months of 2016 to reach JD 1,656.4 million. This increase was chiefly due to: - An increase in miscellaneous revenues by JD 331.5 million to stand at JD 677.6 million. - A drop in property income by JD 43.1 million to stand at JD 273.5 million (of which financial surplus of independent government units amounted to JD 249.8 million against JD 281.6 million during the same period in 2015). - A decrease in “revenues from selling goods and services” by JD 7.5 million to reach JD 705.4 million.  Pension Contributions Pension contributions witnessed a decrease by JD 2.1 million, or 13.9 percent, during the first ten months of 2016, standing at JD 13.0 million.  Foreign Grants Foreign grants decreased by JD 63.1 million, or 15.4 percent, during the first ten months of 2016, standing at JD 346.0 million. 26  
  33. Central Bank of Jordan Monthly Report    Public Expenditures Public expenditures Public Expenditure Structure witnessed an increase by JD (2011-2015) and the first ten months of 2016, JD Million 31.5 million, or 4.9 percent, 10000 in October 2016 compared to the same month in 2015 8000 to stand at JD 676.5 6000 million. Moreover, public 4000 expenditures increased by 2000 JD 187.7 million, or 3.1 0 2011 2012 2013 2014 2015 Jan.-Oct. percent during the first ten 2016 Social Benefits months of 2016 compared to Other Expenditures the same period in 2015, to Capital Expenditures Military Expenditures stand at JD 6,316.0 million. Compensation of Employees This increase was an outcome of the rise in current expenditures by JD 233.6 million, and the decline in capital expenditures by JD 45.9 million.  Current Expenditures Current expenditures increased by JD 233.6 million, or 4.3 percent, during the first ten months of 2016, to reach JD 5,624.6 million. This increase was chiefly due to:     An increase in military expenditures by JD 117.9 million to total JD 1,763.7 million, accounting for 31.4 percent of total current expenditures. A rise in the “compensation of civil sector's employees” (wages, salaries and social security contributions) by JD 20.3 million to reach JD 1,126.3 million, accounting for 20.0 percent of total current expenditures. A rise in social benefit expenditures by JD 12.1 million to stand at JD 1,215.6 million, accounting for 21.6 percent of total current expenditures. An increase in “purchases of goods and services” by JD 64.8 million to stand at JD 343.6 million, accounting for 6.1 percent of total current expenditures.  27
  34. Public Finance   November 2016 A drop in interest payments by JD 48.1 million to stand at JD 695.8 million, accounting for 12.4 percent of total current expenditures. A decrease in goods subsidies by JD 39.4 million to stand at JD 95.2 million, accounting for 1.7 percent of total current expenditures.  Capital Expenditures Capital expenditures decreased by JD 45.9 million, or 6.2 percent during the first ten months of 2016 compared to the same period in 2015, to reach JD 691.4 million.  General Budget Deficit/ Surplus  The general budget, including grants, displayed a fiscal deficit amounted to JD 672.2 million during the first ten months of 2016, against a fiscal deficit in the amount of JD 834.7 million during the same period in 2015. Fiscal Deficit/ Surplus (Incl. Grants) Jan.-Oct.(2011- 2016), JD Million 200 0 -200 -400 -600 -800 -1000 -1200 -1400 2011 2012 2013 2014 2015 2016  The general budget Overall Fiscal Deficit/ Surplus Primary Deficit/ Surplus showed a primary surplus (after excluding interest payments on public debt from total expenditures) amounted to JD 23.6 million during the first ten months of 2016, against a primary deficit of JD 90.8 million during the same period in 2015, if foreign grant was excluded, the general budget recorded a primary deficit in the amount of JD 322.4 million, during the first ten months of 2016, against a primary deficit of JD 499.9 million during the same period in 2015. 28  
  35. Central Bank of Jordan Monthly Report   Oct. 2016 2015 2015  Oct. 2016 2014 2014 2013 2013 2012 2012 2011 2011  Public Debt  Gross outstanding Public Debt domestic public debt As a Percentage of GDP Gross Public Debt 100 increased by JD 1,068.0 million at the end of 80 Gross Domestic Public Debt October 2016 compared 60 External Public Debt to its level at the end of 40 2015 to total JD 16,554.0 20 million, or 60.2 percent 0 of GDP. This rise in gross outstanding domestic public debt was an outcome of the rise Public Debt in gross budgetary 2011- Oct. 2016, JD Million 30000 government debt, on one Gross Public Debt 25000 hand, as “Treasury bills 20000 Gross Domestic Public Debt and bonds” increased by 15000 JD 1,184.0 million at the 10000 External Public Debt end of October 2016, 5000 compared to their level at 0 the end of 2015, standing at JD 13,568.0 million, however, the outstanding balance of “loans and advances” extended by CBJ to the budgetary central government declined by JD 80.0 million to stand at JD 432.0 million. Meanwhile, gross domestic debt of own-budget agencies declined by JD 19.0 million to stand at JD 2,532.0 million, on the other. In this regard, loans and advances extended to these agencies went up by JD 10.0 million to stand 29
  36. Public Finance November 2016 at JD 1 ,999.0 million, while own-budget agencies' bonds decreased by 30.0 million to stand at JD 533.0 million compared to its level at the end of 2015.  Net outstanding domestic public debt (gross outstanding domestic public debt minus government deposits at the banking system) increased by JD 1,479.0 million at the end of October 2016 comparing to its level at the end of 2015 to total JD 14,936.0 million (54.3 percent of GDP).  Outstanding balance of external public debt (budgetary and guaranteed) increased by JD 95.3 million at the end of October 2016 compared to its level at the end of 2015, amounting to JD 9,295.2 million (33.8 percent of GDP). The currency debt structure shows that external debt in US dollars accounted for 60.6 percent, while debt in Euros accounted for 6.7 percent. Furthermore, external debt in Japanese Yen and Kuwaiti Dinars accounted for 7.6 percent and 7.8 percent of the outstanding external public debt, respectively, while external debt in SDRs accounted for 14.5 percent.  Grose public debt (domestic and external) increased by JD 972.7 million at the end of October 2016 compared to its level at the end of 2015 to stand at JD 25,849.2 million, (94.0 percent of GDP), against JD 24,876.5 million (93.4 percent of GDP) at the end of 2015.  External debt service (budgetary and guaranteed) increased by JD 1,018.5 million during the first ten months of 2016 to stand at JD 1,505.6 million, compared to same period of 2015. This rise was a result of domestic bonds in dollar amortization by JD 815.0 million (USD 1,150.0 million), during of February and August of this year. 30  
  37. Central Bank of Jordan Monthly Report    Fiscal and Price Measures  Reducing the prices of all types of oil derivatives, while maintaining the price of liquid gas cylinder unchanged as follows:          Development of Oil Derivatives Price   2016  Percentage  Change Unit October November Unleaded Gasoline 90 Fils/Liter 575 580 -3.3 Unleaded Gasoline 95 Fils/Liter 745 755 -3.2 Gas Oil (Diesel) Fils/Liter 435 435 -4.4 Kerosene Fils/Liter 435 435 -4.4 Liquid Gas (12.5kg) JD/Unit 7.0 7.0 0.0 Fuel oil for industry  JD/Ton 299.4 313.6 -1.9 Fils/Liter 332 340 -5.3 Fils/Liter 337 345 -5.2  Fils/Liter 352 360 -5.0 288.2 302.5 -2.0 Fuel for airplanes  (local companies) Fuel for airplanes (foreign companies)  Fuel for unplanned flights  Asphalt JD/Ton Source: Jordan Petroleum Refinery Company (1/12/2016).  The cabinet adopted a bundle of fiscal measures, which includes the following: (June 2016)   Raising cigarettes price by 50 Fils per packet in the customs zone (inside the Kingdom), and by 100 Fils per packet in the Aqaba Special Economic Zone. Removal of the general sales tax and customs exemptions on clothes and shoes.  31
  38. Public Finance   November 2016 Reducing depreciation allowance on used imported cars. Raising the selling price of Diesel, Kerosene, and unleaded gasoline by 25 Fils per liter.  Raising the special tax on alcoholic beverages and wine from JD 3.75 to JD 5.5 per liter in the customs zone.  The cabinet decided for removal the reduction in fees and taxes on land purchases by 50% (July 2016).  The Council of Commissioners of the Energy and Mineral Resources Regulatory Commission (EMRC) has announced the new electricity tariffs for subscribers, to replace the tariffs published in the Official Gazette in 2015 (October 2016).  Grants, Loans and Other Agreements  Signing a soft loan agreement provided by the World Bank in the amount of USD 300.0 million, as a contribution to cover the fiscal gap for the year 2016 (October 2016).  Signing four grant agreements in the amount of USD 787 million under the US 2016 economic assistance package for Jordan (October 2016), distributed as follows: - Cash Budget support in the amount of USD 412 million, to finance priority projects within the 2016 Budget Law. - Social Sector development in the amount of USD 244.3 million, through the implementation of several projects and programs within the following sectors: health, mother and child care, reproductive health, education, water, environment, and others. - Strengthening democratic accountability in the amount of USD 60 million, will be allocated to implement several projects in the fields of; the rule of law, governance, civil society, and supporting political reform efforts. 32  
  39. Central Bank of Jordan Monthly Report   - Supporting economic development in the amount of USD 70.5 million, will be allocated for the implementation of a several priority projects to promote economic growth, improve economic opportunities, trade and investment, infrastructure, and enhance private sector competitiveness.  Signing two soft loan agreements provided by the French Agency for Development in the amount of EUR 132 million. The first loan (in the amount of EUR 100 million) aims to support the general budget, particularly, the municipal finance sector (Sector Policy Loan). The second loan (in the amount of EUR 32 million), is allocated for the project of improving access to water, and the disposal of sewage in the governorate of Irbid. This loan comes as a part of the financing and donor response to the consequences of the Syrian crisis on Jordan and within the commitments and pledges made under the London conference (November 2016).  33
  40. Public Finance 34 November 2016  
  41. Central Bank of Jordan Monthly Report   Fourth: External Sector  Summary  Total merchandize exports (domestic exports plus re-exports) decreased by 4.9 percent in September 2016 compared to the same month of 2015 to record JD 457.6 million. As for the first nine months of 2016, total merchandize exports decreased by 4.0 percent compared to the same period of 2015 to reach JD 3,998.0 million.  Merchandize imports decreased by 12.9 percent in September 2016 compared to the same month of 2015 to reach JD 994.3 million. As for the first nine months of 2016, total merchandize imports decreased by 8.1 percent compared to the same period of 2015 to reach JD 10,044.3 million.  Consequently, the trade balance deficit (total exports minus imports) decreased by 18.7 percent in September 2016 compared to the same month in 2015; standing at JD 536.7 million. As for the first nine months of 2016, trade balance deficit decreased by 10.7 percent compared to the same period of 2015 to reach JD 6,046.3 million.  Travel receipts decreased by 7.8 percent in October 2016 compared to the same month of 2015 to reach JD 219.4 million, while travel payments increased by 3.8 percent, to reach JD 55.2 million. As for the first ten months of 2016, travel receipts decreased by 1.8 percent to reach JD 2,429.0 million, while travel payments increased by 8.3 percent to reach JD 781.2 million compared to the same period of 2015.  Total workers’ remittances receipts decreased by 1.3 percent in October 2016 compared to the same month of 2015 to reach JD 226.6 million. As for the first ten months of 2016, total workers’ remittance decreased by 3.7 percent compared to the same period of 2015 to reach JD 2,190.9 million.  The current account of the balance of payments registered a deficit of JD 1,634.8 million (12.7 percent of GDP) during the first half of 2016 compared to a deficit of JD 1,176.3 million (9.5 percent of GDP) during the first half of 2015, while the current account deficit excluding grants went up to reach 14.5 percent of GDP compared with 11.6 percent of GDP during the first half of 2015.  Net direct investment recorded an inflow of JD 533.4 million during the first half of 2016, up from JD 449.3 million during the first half of 2015.  35
  42. External Sector November 2016  International investment position (IIP) displayed a net obligation to abroad of JD 25,929.8 million during the first half of 2016; compared to JD 24,412.9 million at the end of 2015.  External Trade  As a result of the decrease in both domestic exports and imports by JD 316.3 million and JD 888.2 million, respectively, during the first nine months of 2016 compared to the same period of 2015, the volume of external trade (domestic exports plus imports) decreased by JD 1,204.5 million to stand at JD 13,332.7 million. Jordan's Major Trading Partners Main External Trade Indicators JD Million JD Million January – September  2015 2016 January – September Percentage Change Percentage 2015 Exports USA  775.1 794.6 2.5 Saudi Arabia 609.4 508.1 -16.6 India 329.0 265.0 -19.5 Iraq 384.5 239.2 -37.8 Kuwait 142.2 183.6 29.1 UAE 169.6 166.7 -1.7 Qatar 77.5 90.7 17.0 China 1,401.3 1,422.4 1.5 Saudi Arabia 1,731.6 1,148.7 -33.7 USA 675.6 674.6 -0.2 Italy 390.0 475.9 22.0 Germany 512.5 434.2 -15.3 UAE 438.3 394.2 -10.1 Turkey 438.8 356.4 -18.8 Imports Change 2016  Percentage  Change  2016/2015 2015/2014 External Trade 14,537.2 -9.5 13,332.7 -8.3 Total Exports 4,163.0 -7.2 3,998.0 -4.0 Domestic Exports 3,604.7 -7.3 3,288.4 -8.8 Reexports 558.4 -6.4 709.6 27.1 Imports 10,932.5 -10.2 10,044.3 -8.1 Trade Balance -6,769.5 -11.9 -6,046.3 -10.7 Source: Department of Statistics. Source: Department of Statistics. 36  
  43. Central Bank of Jordan Monthly Report    Merchandize Exports: Major Exports by Commodity January - September 2016, JD Million Total merchandize exports Clothes decreased by 4.0 percent in Medical & Pharmaceutical Products the first nine months of 2016, to record JD 3,998.0 million. This decrease resulted from a decline in Phosphate Vegetables Potash Fertilizers Fruits and Nuts 0 100 200 300 400 500 600 700 800 domestic exports by JD 316.3 million, or 8.8 percent, to reach JD 3,288.4 million, and the increase in re-exports by 27.1 percent, to reach JD 709.6 million.  The developments of domestic exports in the first nine months of 2016 compared to the same period of 2015 reveals the following: ● Exports of Potash decreased by JD 107.2 million, or 34.0 percent, to stand at JD 208.3 million. The Indian, Chinese and Malaysian markets accounted for 66.9 percent of these exports. ● Exports of Vegetables decreased by JD 53.3 million, or 18.5 percent, to reach JD 235.5 million. The UAE, Saudi and Kuwaiti markets were the main destinations of these exports, accounting for 64.4 percent.  37
  44. External Sector ● Exports of Phosphates decreased by JD 23.6 million, or 8.9 percent, to register JD 241.9 million. This decrease was mainly a result of the decrease in prices by 13.5 percent and the increase in exported quantities by 5.3 percent. It is worth noting that the Indian and Indonesian markets were the main destination for these exports, accounting for 80.5 percent. ● Exports of Medical & Pharmaceutical Products increased by JD 35.0 million, or 12.0 percent, to reach JD 326.4 million. The markets of Saudi Arabia, Algeria, Iraq, and Sudan accounted for 56.2 percent of these exports. 38 November 2016 Major Domestic Exports by Commodity, JD Million First nine months 2015-2016  Domestic Exports 2015  2016 Percentage Change 3,604.7 3,288.4 -8.8 Clothes 758.9 766.0 0.9 USA 689.3 688.1 -0.2 Medical &Pharmaceutical Products 291.4 326.4 12.0 Saudi Arabia 74.7 75.1 0.6 Algeria 33.1 48.0 45.1 Iraq 25.3 36.4 43.8 -20.0 Sudan 29.8 23.8 Phosphates 265.5 241.9 -8.9 India 182.5 150.9 -17.3 Indonesia 38.0 43.7 14.9 Vegetables 288.8 235.5 -18.5 UAE 52.8 52.4 -0.6 Saudi Arabia 57.1 52.0 -9.1 Kuwait 42.7 47.2 10.6 Potash 315.5 208.3 -34.0 India 88.9 57.6 -35.2 China 95.1 42.6 -55.2 Malaysia 35.1 39.1 11.4 Fertilizers 101.7 114.2 12.4 Turkey 17.7 36.0 102.7 India 45.1 29.9 -33.7 8.3 29.6 257.9 130.1 103.9 -20.2 Iraq Fruits and Nuts Kuwait 38.4 38.6 0.5 Saudi Arabia 39.7 28.8 -27.5 UAE 11.7 11.7 -  Source: Department of Statistics.  
  45. Central Bank of Jordan Monthly Report   ● Consequently, the commodity breakdown of domestic exports Geographic Distribution of Domestic Exports January - September 2016 Arab Countries 49.1% European Union countries 2.7% indicates that exports of clothes, “medical and United States of America 24.2% India 8.1% Indonesia 1.9% Other Countries 14.0% pharmaceutical products”, phosphates, vegetables, potash, fertilizers and “fruits and nuts” topped the list of domestic exports in the first nine months of 2016; accounting for 60.7 percent of domestic exports, compared with 59.7 percent in the same period of 2015. Meanwhile, the geographical distribution of domestic exports indicates that the USA, Saudi Arabia, India, Iraq, Kuwait, the UAE and Qatar were the main destination markets for domestic exports in the first nine months of 2016; accounting for 68.4 percent of domestic exports, compared with 69.0 percent during the same period of 2015.  39
  46. External Sector  November 2016 Merchandize Imports: Merchandize imports decreased by 8.1 percent to reach JD 10,044.3 million in the Major Imports by Commodity January - September 2016, JD Million Transport Equipment & Spare parts Textile Yarn, Fabrics & Related Products Petroleum Products first nine months of Crude Oil 2016, compared to a Electrical Machinery, Apparatus and Appliances decrease by 10.2 percent during the same Iran and Steel Medical & Pharmaceutical Products 0 200 400 600 800 1000 1200 period of 2015.  The developments of imports in the first nine months of 2016 compared with the same period in 2015 reveals the following: ● Petroleum Products imports decreased by JD 444.8 million, or 50.4 percent, to reach JD 437.7 million. This decrease was mainly due to a decline in imported quantities and prices, in addition to the start of the Liquefied Natural Gas (LNG) terminal operations at the port of Aqaba, as the Kingdom’s imports of LNG reached by JD 390.9 million. The main source markets of petroleum products imports were Saudi Arabia, Italy, and the UAE; accounting for 67.7 percent. ● Crude oil imports decreased by JD 349.5 million, or 45.9 percent, to reach 412.1 million. This decrease was mainly due to a decline in prices by 27.9 percent and in imported quantities by 24.9 percent compared to the same period of 2015. Noting that Crude oil imports came from the Saudi market. 40  
  47. Central Bank of Jordan Monthly Report   ● Transport Equipment and Spare Major Imports by Commodity, JD Million Parts First nine months 2015-2016 imports increased by 2015 JD 100.2 million or 10.2 percent to reach JD 1,081.1 million. South Korea, Japan and the USA were the main origin markets for these imports; accounting for 59.4 percent. ● Electrical Machinery, Apparatus, and Appliances imports increased by JD 52.7 million or 17.1 percent. The markets of China, Italy, and Turkey accounted for 44.4 percent of these imports.  2016 Percentage Change 10,932.5 10,044.3 -8.1 980.9 1,081.1 10.2 South Korea 205.9 226.7 10.1 Japan 212.3 226.0 6.5 USA 154.7 189.7 22.6 447.9 458.8 2.5 China 173.8 176.4 1.5 Taiwan 145.6 144.3 -0.9 Turkey 28.8 45.8 59.2 Total Imports Transport Equipment & Spare Parts Textile Yarn, Fabrics and Related Products 882.5 437.7 -50.4 Saudi Arabia 271.0 128.1 -52.7 Italy 50.7 110.3 117.7 Petroleum Products UAE 23.3 57.8 147.5 Crude oil 761.6 412.1 -45.9 761.6 412.1 -45.9 308.6 361.3 17.1 China 82.9 100.2 20.9 Italy 18.7 30.2 61.1 Turkey 30.1 30.2 0.3 352.9 346.1 -1.9 China 134.3 114.4 -14.8 Iran 64.3 52.0 -19.2 Ukraine 20.2 37.8 87.2 288.9 328.7 13.8 Germany 37.1 44.4 19.9 USA 29.4 39.0 32.7 France 30.9 32.9 6.6 Saudi Arabia Electrical Machinery, Apparatus & Appliances Iron and Steel Medical & pharmaceutical products  Source: Department of Statistics.  41
  48. External Sector November 2016 ● Consequently, the commodity composition of imports indicates that “transport Geographic Distribution Import of Imports September January - August 20162016 Other Countries 29.3% Arab Countries 21.7% equipment and spare parts”, “textile yarn, fabrics and related products”, “petroleum products”, crude European Countries 24.6% oil, United States of America 6.7% China 14.2% Turkey 3.5% “electrical machinery apparatus and appliances”, “iron and steel” and “medical and pharmaceutical products” topped the list of imports in the first nine months of 2016, accounting for 34.1 percent of total imports; down from 36.8 percent during the same period of 2015. Meanwhile, the geographical distribution of imports indicates that the markets of China, Saudi Arabia, the USA, Italy, Germany, the UAE, and Turkey were the main sources of imports in the first nine months of 2016; accounting for 48.8 percent of total imports, compared to 51.1 percent in the same period of 2015.  Re-Exports The value of re-exported goods increased by JD 151.2 million, or 27.1 percent in the first nine months of 2016 compared to the same period of 2015, to reach JD 709.6 million. 42  
  49. Central Bank of Jordan  Monthly Report  Trade Balance The trade balance deficit in the first nine months of 2016 decreased by JD 723.2 million, or 10.7 percent, to register JD 6,046.3 million, compared to the same period of 2015.  Total Workers’ Remittances Receipts Total workers’ remittances receipts decreased by 1.3 percent in October 2016, compared to the same month of 2015 to register JD 226.6 million. As for the first ten months of 2016, total workers’ remittances receipts decreased by 3.7 percent compared to the same period of 2015 to reach JD 2,190.9 million.  Travel  Receipts Travel receipts decreased by JD 18.5 million, or 7.8 percent, in October 2016, compared to the same month of 2015 to register JD 219.4 million. As for the first ten months of 2016, travel receipts decreased by JD 44.4 million or 1.8 percent compared to the same period of 2015 to reach JD 2,429.0 million.  Payments Travel payments increased by JD 2.0 million, or 3.8 percent, in October 2016, compared to the same month of 2015 to stand at JD 55.2 million. As for the first ten months of 2016, travel payments increased by JD 59.7 million or 8.3 percent compared to the same period of 2015 to reach JD 781.2 million.  Balance of Payments The preliminary data of the balance of payments during the first half 2016 compared to the first half of 2015, reveals the following:  The current account recorded a deficit of JD 1,634.8 million (12.7 percent of GDP) compared to a deficit of JD 1,176.3 million (9.5 percent of GDP) during the first half of 2015. While the current account deficit excluding grants increased to reach JD 1,864.8 million or 14.5 percent of GDP compared to JD 1,441.7 million or 11.6 percent of GDP in first half of 2015. This was an outcome of the following developments:  43
  50. External Sector November 2016  A decrease in the trade balance deficit during the first half of 2016 by JD 46.4 million, 1.3 percent, to reach JD 3,532.9 compared million to JD 3,579.3 million in the first half of 2015. Current Account Components During the first half 2014-2016, JD Million 2500 1500 500 -500 -1500 -2500 -3500 -4500 2014 2015 2016 Trade Balance Current Transfers Services & Income Account Current Account  A decrease in the surplus of the services account compared to the first half of 2015 by JD 25.6 million to reach JD 457.2 million.  The income account recorded a deficit of JD 38.5 million compared to a similar deficit of JD 77.9 million during the first half of 2015. This was an outcome of the decrease in the deficit recorded in investment income (net) by JD 42.6 million to reach JD 147.8 million and the decrease in the surplus recorded in compensation of employees (net) by JD 3.2 million, to reach JD 109.3 million.  A decrease in the surplus of net current transfers by JD 518.7 million; to reach JD 1,479.4 million, as a result of the decrease in net transfers of the public sector (foreign grants) during the first half of 2016 by JD 35.3 million, to reach JD 229.7 million, and the decrease in the net transfers of other sectors by JD 483.4 million to reach JD 1,249.7 million. 44  
  51. Central Bank of Jordan Monthly Report    The capital and financial account during the first half of 2016 registered a net inflow of JD 1,459.1 million, compared to a net inflow of JD 674.8 million during the first half of 2015. This can be attributed to the following:  Direct investment recorded a net inflow of JD 533.4 million compared to an inflow of JD 449.3 million during the first half of 2015.  Portfolio investments recorded a net inflow of JD 1.3 million compared to an outflow of JD 50.4 million during the first half of 2015.  Other investments registered a net outflow of JD 87.5 million compared to a net inflow of JD 552.0 million during the first half of 2015.  A decrease in the reserve assets of CBJ by JD 981.9 million, compared to an increase of JD 317.0 million during the first half of 2015.  International Investment Position (IIP) The IIP, which represents the Kingdom’s net position (stock) of external financial assets and liabilities, displayed an obligation to abroad of JD 25,929.8 million at the end of June 2016 compared to JD 24,414.9 million at the end of 2015. This increase was due to the following developments:  45
  52. External Sector November 2016  A decrease in the position of external assets (the stock of claims, obligations and financial assets) for all economic sectors (resident) in the Kingdom by JD 713.4 million to reach JD 17,944.6 million at the end of June 2016 compared to the end of 2015. The CBJ’s reserve assets decreased by JD 778.6 million.  An increase in the position of external liabilities (the stock of claims, obligations and financial assets) on all economic sectors residing in the Kingdom by JD 801.5 million at the end of June 2016 compared to the end of 2015; standing at JD 43,874.3 million due to the following developments:  An increase in the stock of direct investment in Jordan by JD 565.4 million to stand at JD 21,911.4 million.  An increase in the outstanding balance of the general government long–term loans by JD 62.8 million to reach JD 3,511.7 million.  An increase in the extended trade credits to non-residents by JD 82.2 million to reach JD 640.9 million.  A decrease in the deposits of non-residents at the banking system by JD 54.8 million, to reach JD 7,821.1 million. 46  