Violence in Jordan has escalated in recent hours, with a senior officer killed and others from the General Security Agency injured, while Jordanian officials have vowed to strike “with an iron fist” at those they describe as “saboteurs.”
Jordanian authorities banned the TikTok social media app after hate content spread, while Jordan’s King Abdullah II said Friday that those who raise arms against the state and attack public property will be dealt with “firmly.”
Several Jordanian cities are witnessing a wave of protests over the high prices of fuel derivatives, and some areas witnessed riots, blocking roads, and burning government buildings, according to local media.
During the funeral of the officer killed in the riots in the south of the Kingdom, Jordan’s King Abdullah II referred to the difficult economic conditions experienced by citizens, while government spokesman Faisal Al-Shboul said that economic conditions, despite their difficulty, “are better than those in brotherly and neighboring countries where inflation rates have risen and their currencies have fallen due to the economic conditions they have experienced.”
What are the economic conditions in the Kingdom?
Fuel prices
The increase in fuel prices at the end of November led to a doubling of the prices of some oil derivatives compared to last year, especially diesel and kerosene, which are widely used in the transport, shipping, and heating fuel sectors.
Last November, Jordan’s Petroleum Derivatives Pricing Committee decided to raise the price of a liter of diesel to 895 Fils ($1.26) this December, compared to 615 Fils ($0.87) in December 2021, an increase of 46 percent.
The price of kerosene reached 860 Fils ($1.21) this month, compared to 615 Fils ($0.87) during the same month last year, an increase of 40 percent, according to data from the Jordanian Ministry of Energy.
The Jordanian government fixed fuel prices for several months this year after the rise in international prices due to the war in Ukraine, which reduced tax revenues imposed on fuel by about 550 million dinars, according to government statements, which considered it part of the item “fuel subsidies.”
The government generates tax revenues on fuel derivatives of more than 1.2 billion dinars annually.
In the draft budget law for the year 2023, the government did not include any allocations related to fuel subsidies for citizens.
Prime Minister Bishr al-Khasawneh said in remarks that “the government does not have the luxury of subsidizing hydrocarbons.”
The IMF said the kingdom should continue with fiscal reforms, which include “phasing out the non-targeted subsidies that were applied to fuel prices, given that this cancellation provides financial resources to spend on priority items while protecting low-income groups from rising prices through additional cash transfers.”
According to the latest official data, the value of the Kingdom’s imports of crude oil and its derivatives increased by about 67 percent during the months of January to August of this year, compared to the same period in 2021.
The value of the oil bill amounted to about 2.4 billion dinars, compared to 1.4 billion dinars during the first eight months of 2021.
Inflation
Jordanian officials reiterate that inflation rates in the Kingdom are among the lowest in the region and did not exceed 4 percent during the last period, despite the consequences of the supply chain dilemma, the Corona pandemic, and the Ukrainian war.
The annual inflation rate rose to more than 5.2 percent by the end of October, according to the fifth review of Jordan’s economic performance, which was announced by the IMF last November.
The IMF explains that domestic commodity prices are considered “moderate” compared to the global level, but reflect a rise in the transmission of increases in global fuel and food prices.
The official inflation report issued by the Department of Statistics shows that the fuel and lighting group increased its prices by more than 34 percent, transportation by 5 percent, rents by 4.4 percent, culture and entertainment by 14 percent, and health by 7 percent.
Unemployment and poverty
Official figures reveal that unemployment rates in the Kingdom rose in 2021 to about 2 percent, while its rates among young people reach about 50 percent.
The IMF notes that unemployment figures have fallen slightly in the kingdom but remain at a high level of around 23 percent, especially among young people and women.
The IMF says Jordan’s economy is still recovering from the coronavirus pandemic, with medium-term economic growth expected to reach 3 percent, but there are risks “associated with a global economic slowdown.”
Poverty rates in Jordan have risen to 24 percent, up 6 percent from previously, according to estimates made by Minister of Planning and International Cooperation Nasser Shraideh in August 2021.
The minister attributed the reasons for the increase in poverty rates to the repercussions of the Corona pandemic, while the World Bank expects the poverty rate to increase by about 11 percent from current levels due to Corona.
According to official figures, the average monthly wage is $600, and the minimum wage is $300.
The capital, Amman, ranked 6th in the Arab world and 115th globally out of 227 cities in the world in the ranking of the most expensive cities for international employees and expatriates, according to the annual Mercer report on the cost of living issued in the middle of this year.
Public Finance
In terms of public indebtedness, Jordan suffers from difficult economic conditions, exacerbated by debts of about $47 billion, or 106 percent of GDP, according to public finance data from January to the end of August.
According to the Ministry of Finance, these debts are divided into 14 billion dinars of internal debt and about 16 billion dinars of external debt.
Local revenues during the first eight months of this year amounted to more than 5.4 billion dinars, an increase of 447 million dinars over the same period last year, due to the increase in tax and non-tax revenues.
Tax revenue collection increased to 1.3 billion dinars during the first eight months of the year, compared to 993 million dinars during the same period last year.
The kingdom’s economy relies heavily on aid, especially from the United States, the European Union, and Gulf states.
Ministry of Finance data said that foreign grants during the first eight months of this year amounted to 125 million dinars, compared to 555 million dinars during the same period in 2021, a decrease of more than 430 million dinars.
Regarding the draft budget law for 2023, the government expects to collect public revenues of 9.5 billion dinars, while public expenditures amount to 11.4 billion dinars, which means a deficit estimated at more than 1.8 billion dinars.
The government expects tax revenues to reach 6.6 billion dinars, 2.1 billion dinars in non-tax revenues, and 802 million dinars in external grants.
Nearly 60 percent of state expenditures go to salaries and pensions in a country with an economy of $50 billion.
Oman and Washington signed an agreement last month under which Washington provided Oman with an $845 million grant to support the public budget.
In September, the two countries signed a memorandum of understanding under which Washington will provide total assistance during the period 2023-2029 worth $ 10 billion, at an annual rate of $ 1.45 billion starting in 2023.
Ratings agency Moody’s raised its outlook for Jordan this month from “stable” to “positive,” raising its overall rating from B1 with a stable outlook to B1 with a positive outlook.
Refugees
Jordan hosts some 650,000 Syrian refugees registered with the United Nations, while Jordanian authorities estimate that 1.3 million people have sought refuge in the kingdom since the outbreak of the war in Syria.
Jordan says the cost of hosting these Syrian refugees on its soil exceeds $12 billion.
To receive notification of the most important news and urgent matters, join our
telegram channel through the link