Regional unrest costs Jordan $4 bn

Mar 25, 2013 12:00 AM

Unrest across the Arab world over the past two years and in particular in neighbouring Syria has cost Jordan's economy as much as $4 bn, according to the Institute of International Finance (IIF).

The desert kingdom incurred about US$1 bn in economic output losses in 2011 when the protests swept across the Arab world and led to the toppling of four leaders. In 2012, the impact on the kingdom's economy was estimated at US$3 bn or 3.4 percent of gross domestic product (GDP) by IIF.

The country's economy would have expanded 4.5 percent in 2011 and 5.5 percent last year instead of less than the 3 percent rate recorded in each of both years.

An exodus of Syrians from their war torn country has resulted in an influx of about 460,000 people in the kingdom, which is likely to double by the end of the year if the conflict in Syria continues unabated.

Hosting Syrian refugees is costing Jordan about US$550 mm a year, King Abdullah said when he met with president Barack Obama who was touring the region. The US has promised to give the kingdom US$200 mm in aid in addition to the regular aid it gives Jordan.

The kingdom, which imports more than 90 percent of its energy needs, has one of the smallest economies in the Arab world and relies on foreign grants and loans to finance its current account and fiscal deficits.

Jordan's fiscal deficit reached 9.5 percent of GDP in 2012 exacerbated by the regional unrest, according to the IIF. The size of the deficit would have been about 3.6 percent in normal conditions.

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