Jordan’s first-half trade deficit widened 18 per cent from the same period last year to JD2.792 billion ($3.9 billion), due to a higher bill for imported Saudi oil, official data showed on Monday.
A chronic trade deficit and spiralling budget deficit have for years been among the biggest concerns for Jordanian economic policy-makers, who are keen to attract more capital inflows as the economy begins to recover.
Although it is unlikely to act yet, these twin deficits could eventually force the government to borrow more to avoid the currency depreciating and hurting the spending power of ordinary Jordanians, the majority of whom are lower-paid workers.
Imports rose 11.7 per cent in January-June from a year earlier to JD5.233 billion due to rises in oil prices and consumption, data from the Department of Statistics showed.
Jordan, which imports most of its energy from Saudi Arabia, saw its crude oil import bill in the first six months of the year surge 55.5 per cent from a year ago to JD609 million, the data showed.
Imports from Saudi Arabia, the largest exporter to Jordan, topped JD918.7 million, a figure that includes crude oil and consumer and industrial goods.
Jordan’s total exports rose 5.2 per cent from a year earlier to JD2.441 billion in the January-June period.
Domestic exports of the kingdom’s main hard currency earners — garments, phosphates, potash, pharmaceuticals and fresh produce to neighbouring markets — rose 16.6 per cent to JD2.059 billion with signs of recovery from the global downturn.
But the recession hurt Jordan’s role as a transit hub for re-exports to neighbouring countries, including Iraq, Syria and Saudi Arabia. The tax-free goods that are included in the exports figure fell 31 per cent in the first six months of this year from a year ago to JD381.7 million.
Garments exports to the US under a free-trade deal saw signs of a recovery after being hit hard last year by a slump in US consumption.
They rose 2.4 per cent to JD301.5 million in the first six months of this year against the same period last year.
The pickup in the volume of potash sales, reflecting a global rebound in demand for fertilisers, helped double the sales value of raw potash by 70.5 per cent to JD214.6 million.
But with prices of phosphates still almost half 2008 levels in the wake of the global recession, exports of the raw rock also used in fertilisers fell 28.7 per cent to JD122.6 million in the first six months of this year compared with last year, the data showed.
The current account deficit has traditionally been covered by strong foreign direct investment and portfolio inflows, including remittances from tens of thousands of Jordanians living abroad, mainly in the Gulf Arab region