Trade balance deficit 31.9% higher in 2021 than in previous year

Jordan relies heavily on imports especially crude oil and gas from Gulf countries. (Photo: Flickr)
AMMAN — According to a statement issued on Sunday by the Department of Statistics, the trade balance deficit increased by 31.9 percent in 2021 compared to 2020.اضافة اعلان

Ministry of Industry, Trade, and Supply Spokesman Yanal Al Barmawi told Jordan News that Jordan exports much less than it imports, which results in the trade balance deficit.

In 2020, he said, the entire world experienced economic difficulties; Jordan experienced a significant decline in total exports at the time, with the effects of these difficulties manifesting themselves in 2021.

Jordan, according to Barmawi, relies heavily on imports for its needs, particularly crude oil and gas from the Gulf countries, and, normally, the higher the oil prices as a result of global conditions, the larger the trade balance deficit.

He emphasized that among the ministry’s plans and strategies is the ongoing work to reduce the trade balance deficit by increasing the value of Jordanian exports and opening new markets for them.

According to economist Ahmed Thoqan Hindawi, the COVID-19 pandemic created an international supply chain crisis all over the world, whether for raw material suppliers, importers, traders, or citizens, and this affected Jordan’s economic sector in 2020 and was expected to have a negative impact on the Jordanian trade balance through 2021.

Hindawi said that what helped during these difficult times were the support programs provided by the government and the Central Bank during the COVID-19 pandemic, through which interest rates were reduced, loan repayments were postponed, and several programs to support enterprises were established, as well as the Central Bank’s repurchasing of financial bonds.

All this, said Hindawi, resulted in the injection of JD2.7 billion into the market, which should help improve the capacities of the productive sectors.

“All these efforts are expected to bear fruit in 2022, as the trade deficit in 2021 was expected,” he said, adding that because the world is gradually emerging from the pandemic, the results of industrial, commercial, and economic recovery will begin to emerge this year, and the gap between Jordanian exports and imports will narrow.

Economist Mufleh Aqel told Jordan News that the trade balance deficit appears to be less in 2020 than in 2021 because work was disrupted in some sectors, with no discernible impact on the trade balance. According to him, the demand and consumption curves were narrow, so both imports and exports decreased, but the decrease in import was greater than the decrease in exports.

According to Aqel, in 2021 exports increased to approximately JD6,650 million, while imports reached JD15,300 million dinars, bringing the trade balance deficit to more than JD8 million dinars.

Aqel said he did not expect any significant improvement in the gap between exports and imports, and that the reality is that Jordanian exports have not increased significantly in recent years, and will not unless there is a structural change in the economy to improve these exports.

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