Daily Times

In his recent meeting to brief Al Rai newspaper journalists, Prime Minister Hani Mulki, referring to the state of the economy, assured that there is light at the end of the tunnel.

That was, of course, an optimistic statement indicating that economic recovery is at hand, perhaps started, and that future indicators are on the positive side and promising.

It seems that finally there is actually some light at the end of the tunnel that is not seen or imagined by the prime minister alone, but also by many observers and shown in several economic indicators. A tangible improvement of many meaningful indicators occurred during the fourth quarter of last year: First, the Central Bank of Jordan reserve of foreign exchange started to rise as of November 2016 and in every month since then. Most likely the trend will continue. Second, receipts from incoming tourism rose during the last quarter of 2016 and the first month of 2017 by a substantial rate of 12 per cent.

There is every reason to believe that tourism is witnessing a comeback. Third, remittances from Jordanian expatriates working abroad rose during the last month of 2016 and the first month of 2017 by 3.2 per cent and 2.4 per cent respectively.

Fourth, the budget deficit in the month of December declined by JD105 million.

The overall deficit last year was 5 per cent lower year-on-year, indicating that the economic reform programme is working. These are four selected important economic indicators that took place in the last part of 2016 and the first month of 2017. They show that there is actually light at the end of the tunnel, which can be seen. We may not have to wait for long before we emerge from the tunnel into the open. Economic recovery is already happening, albeit slowly, like recovery elsewhere.

Will 2017 be a difficult year?: Sure, but the light at the end of the tunnel inspires hope that it will be better, especially if one looks at the following projections for 2017.

First, the economic growth rate will rise from 2 per cent in 2016 to 2.8 per cent in 2017, perhaps to 3.3 per cent hoped by the government. Second, GDP in current prices will grow at a rate higher than the debt growth rate, resulting in reducing debt as a percentage of GDP for the first time in several years.

Third, the budget deficit in 2017 will be less than 3 per cent of GDP as a result of increasing domestic revenue and suppressing current expenditure. Foreign aid and grants are likely to decline below the budget estimate. These may be substantially lower than last year’s because the Gulf grant for five years has come to an end and the international community continues to fail to honour the commitments it made to Jordan at the conference for donor countries held in London in February 2016 to support countries that accommodate Syrian refugees.