Despite the uncertainty in the region, Jordan's economy grew
by 1.9% in 2018, compared with 2.1% in 2017. However, this rate
is 0.5% higher than the average growth rate in MENA countries
of 1.4%. As for Q1 2019, the economy grew by 2.0% compared with
1.9% during the same quarter of 2018. GDP is expected to grow
by 2.2% and 2.4% in 2019 and 2020, respectively.
The inflation rate reached 4.5% in 2018, compared with 3.3%
in 2017, driven by higher oil prices and several government
fiscal measures. By end-July 2019, inflation dropped to 0.5%,
from 4.5% during the same period of 2018. Inflation is expected
to not exceed 1.0% in 2019, driven by the fading out effects of
the government measures, the expected decline in oil and food
prices, and the slowdown in global growth.
Monetary and financial stability is the CBJ's primary
objective. Jordan's government delegated this responsibility to
the CBJ, as an independent central bank, and it is enshrined in
the CBJ's law. The CBJ's independence enhances its credibility
and transparency, which are necessary to manage monetary policy
and achieve its objectives.
In this regard, the CBJ has balanced the preservation of
monetary and financial stability with the goal of stimulating
economic growth. Monetary policy tightening during late 2016 to
2018 was key to keep the reserves at comfortable levels. On
August 4 2019, the CBJ decided to cut interest rates on all its
monetary policy tools, in response to the recent interest rates
developments in regional and international markets, and in
light of the significant improvements in the balance of payment
and monetary indicators.
However, while the CBJ stands ready to react immediately to
ensure that its objectives are met, it has on the other hand
introduced many initiatives to improve bank financing to vital
economic activities to boost job creation and economic
The CBJ is fully committed to maintaining the exchange-rate
peg, which has proved its efficiency as the nominal anchor of
monetary policy and helped to maintain a comfortable level of
foreign reserves. By end-July 2019, reserves covered 7.5 months
of goods and services imports. Recent external sector
indicators are encouraging and point to a 3.0% decline in the
trade deficit for the first five months of 2019. This decline
reflected a 0.6% drop in imports and 3.4% increase in exports.
During the H1 2019, tourism income grew by 8.3%, reaching $2.6
billion, while total workers' remittances increased by 1.3%,
reaching $1.8 billion.
Fintech is a crucial enabler in making financial services
more efficient and convenient for financial institutions and
consumers. At the same time, it ensures the integrity of the
financial system. The CBJ has established a FinTech Regulatory
Sandbox to support innovation, promote entrepreneurship, and
provide a safe environment for applicants to test innovative
The CBJ has also maintained a cautious approach in observing
monetary stability and ensuring the protection of financial
consumers in the Kingdom. In 2014, the Bank banned financial
institutions from dealing with cryptocurrencies. At the same
time, it announced its intention to experiment with
technologies such as blockchain.
Jordan is constantly facing new challenges and risks,
including cyber and systemic risks resulting particularly from
fintech and digital financial services. Regulatory reforms and
accounting standards, such as Basel III and IFRS 9, enhance
These risks are being contained. Our banking system remains
resilient and safe due to a strong regulatory framework and
close monitoring of emerging risks.