Total investment in Jordan in the first nine months of 2010 declined by 8.45 percent, with foreign investment hardest hit and down by nearly a quarter, according to the latest figures released by the Jordan Investment Board (JIB).
Between January and September 2010, the total capital invested in Jordan was JD1.093bn ($1.543bn), a drop of 8.45 percent compared to the same period last year.
Of the total investment, 80 percent came from local companies, according to a report by The Jordan Times newspaper.
The JIB figures showed that international investment was hit the hardest, declining 24 percent year-on-year to JD214m ($302.26m) in the first three quarter of 2010.
Saudi Arabia was the main source for foreign investment, investing JD155m ($218.92m) over the same period. Taiwan was second, followed by the UAE, Austria, Turkey, Iraq and the Palestinian Authority.
The Industrial sector received JD525m ($741.52m) and the largest share of the investment, followed by the amusement park sector (JD252m / $355.93m) and hotels sector (JD201m / $283.89m).
“The shrinking investments in Jordan, especially those coming from the Gulf, are a result of the global financial crisis that affected many companies in the region,” economist Husam Ayesh told The Jordan Times.
“The drop in oil prices and the subsequent lower revenues are also a reason. In addition, many companies in the region have cancelled, rescheduled or lowered budgets for new investments,” he added.
Despite the drop in investment, the Jordanian Ministry of Finance reported earlier this month that the kingdom’s budget deficit decreased by 44.5 percent in the first eight months of 2010, as a result of an increase in domestic revenues and foreign aid.
Between January and August the kingdom’s deficit amounted to JD427.8m ($602.96m), compared to JD757.7m ($1.067bn) in the same period last year, the Ministry reported.
The healthier outlook for the state’s finances was attributed to a 6.8 percent increase in domestic revenues and foreign aid, which rose to JD3.14bn ($4.425bn), the Jordan News Agency confirmed.
Foreign aid into the country more than doubled to JD248.6m ($350.38mm), up from JD102.7m ($144.75m) in 2009.
Domestic revenues increased 1.9 percent to JD2.89bn ($4.07bn), boosted by an increase in tax revenues.
Total expenditure over the period remained stable at around JD3.569bn ($5.03bn).
Overall state debt rose 7.9 percent to JD10.42bn ($14.68bn), amounting to 53.7 percent of total GDP.