Dhaman 2022 report foresees increased investment in Jordan

AMMAN — A report by the Arab Investment and Export Credit Guarantee Corporation (Dhaman) expected a rise in total investments in Jordan during 2022 compared with 2021.

The 2022 performance predictions and the Dhaman Arab economy report in 2021 indicate that the total investments in Jordan during 2022 will reach $8.9 billion, representing 17.8 per cent of the total output, read the Dhaman report. 

The report also expected that the value of investments in the Kingdom during 2021 would be $8.4 billion, constituting 18.5 per cent of the Gross Domestic Product (GDP) for the same year. During 2019 and 2018, investments constituted 16.7 per cent and 17.6 per cent of the GDP, with a value of $7.5 billion, and $7.6 billion respectively.

According to the report’s forecast, the GDP will continue to grow at 2.7 per cent, reaching $47.5 billion in 2022. The growth rate in 2018 and 2020 was 1.9 per cent and 1.6 per cent.

The report was based on statistics from the International Monetary Fund (IMF), indicating that the per capita GDP could rise to approximately $4,394 in 2021, up from $4,286 in 2020. It is expected to continue rising to $4,565 this year.

The report showed a rise in inflation by two per cent this year compared with 1.6 per cent in 2021 and 0.4 in 2020. A decrease in the budget deficit by 5.9 per cent of output is expected in 2022, compared with expectations of 7.8 per cent in 2021.

However, economist Wajdi Makhamreh noted that the report numbers are likely to be “over-exaggerated” as there are “no indicators as to what kind of investments and in which sectors would they be”.

“Many questions should be raised regarding the numbers in the report, as to what are the numbers based on and if there will be incentives for neighbouring countries to increase investments in Jordan during 2022,” Makhamreh told The Jordan Times on Saturday.

Makhamreh noted that in the past two years, Jordan has witnessed a decline in foreign investments.

However, new sectors and companies are expanding in Jordan, with the government announcing that they will prioritise investment in the national carrier project and railways. This, combined with the private sector investments means that these figures can be realised. 

 “If investors are attracted to invest in these projects or the establishment and expansion of companies in promising sectors such as the agriculture and logistics sector, such numbers may be possible,” Makhamreh added.

Meanwhile, economist Hosam Ayesh stressed that there will be a noticeable increase in investments this year. 

“In the past three years, foreign direct investment has been steadily declining. In 2021, the Kingdom witnessed fewer investments than in 2020. Therefore in 2022, whatever the size of the investments, it will be better than the past two years,” Ayesh told The Jordan Times.

Ayesh highlighted that the increase in investments depends on pandemic developments, such as the new Omicron variant. Interest rates alongside other economic data will impact investment levels. 

“The formation of the new Ministry of Investment plays a major role in amending the investment law, which is an important factor to improve investments in Jordan for this year. However, the numbers should be more accurate and realistic as they would not reach the report’s rates,” he added.

Ayesh also noted that interest rates in the US are expected to rise by fourfold, pushing the rate of investment in Jordan.  “This comes at a time of high inflation, leading to high lending rates as well as reducing liquidity in the market to control inflation. This is not suitable for the Jordanian economy,” he said. 

Ayesh emphasised that the recovery of the Jordanian economy requires increased customer spending. Alongside this, it needs more investments and banking facilities to support investors and economic activity.