Outlook for 2011-15

• Power in Jordan is expected to remain firmly in the hands of the king, Abdullah II, who will retain the loyal support of the army and the security services.
• The new government, appointed in response to popular demonstrations in January 2011, will attempt to balance tactical political concessions with its long-standing priority of economic reform.
• Jordan's fiscal deficit is expected to remain wide over the forecast period, averaging 5.6% of GDP a year (including grants), as revenue growth is held back by sluggish economic expansion.
• The Central Bank of Jordan will retain a relatively loose monetary policy, in an effort to encourage commercial bank lending.
• Although it will recover over the forecast period, real GDP growth is likely to remain below the highs of 2004-08, as the economy struggles because of weak public spending growth and the end of the construction boom.
• We have revised higher our inflation forecast for 2011 to an average of 6.6%, in line with an upward adjustment to our projections for global commodity prices. Overall, we expect inflation to average 4.9% in 2011-15.

Monthly review

• Anti-government protests have taken place around Jordan, mimicking similar protests in Egypt and Tunisia. The demonstrators protested against high prices, unemployment and corruption and demanded political reform.
• King Abdullah has responded to unrest by sacking the prime minister, Samir Rifai, and his government on February 1st. A former prime minister, Marouf Bakhit, has been asked to form a cabinet prioritising political reform.
• The government has produced two economic packages, worth a combined JD460m (US$649m) in 2011 alone, to alleviate the economic concerns of protesters.
• The US government has announced it will give Jordan an additional US$100m in aid, directed at Jordan's health and education services.
• The US Heritage Foundation has ranked Jordan 38th in the world in its 2011 Index of Economic Freedom. It was 4th out of 17 Middle Eastern countries and showed the greatest improvement in the region in 2010.
• Jordan's Ministry of Tourism has released figures showing a sizeable increase in visitors in 2010, with tourism revenue up by 17%. These gains could yet be checked by a regional decline in tourism following unrest in Egypt.