JEDDAH: Key contributors to Jordan’s growth are expected to be stronger construction activity and mining exports as well as higher government investment, according to a study.

QNB Group has published its Jordan Economic Insight 2015. The report examines how the Jordanian economy continues to recover, despite a difficult regional context and a weak global economy.

Despite a difficult regional context, real GDP growth is expected to accelerate to 4.0 percent in 2015 and gather further momentum in 2016 (4.3 percent) and 2017 (4.5 percent) as economic reforms continue to bear fruit.

Sustained lower energy prices are likely to increase competitiveness and domestic demand.

Consumer Price Index (CPI) inflation is expected to slow to 0.8 percent in 2015 on the pass-through of lower oil prices, but recover in 2016-17.

Lower global oil prices are expected to lead to negative foreign inflation in 2015, which will be counterbalanced by the continued presence of refugees in Jordan adding to domestic inflation.

Overall inflation will pick up in 2016-17 on a gradual pickup in foreign inflation due to the expected recovery in oil prices and stronger domestic demand.

Lower oil prices will narrow the current account deficit in 2015; the deficit will widen in 2016-17 once oil prices rebound.

“We expect a large reduction in the energy import bill, supported by the lower oil prices and the start of LNG imports, following the launch of the LNG terminal at the port of Aqaba starting in May 2015,” said the report.

A new bilateral agreement with India for Jordanian phosphate exports as well as a projected recovery in the price of potash is expected to lead to higher export growth

Deposit growth is likely to slow in 2015 (5.2 percent) on lower inflation, but rebound in 2016 (6.9 percent) and 2017 (7.4 percent) on stronger economic growth and moderately higher inflation

Lending growth is expected to rebound in 2015 (7.4 percent), 2016 (8.9 percent) and 2017 (9.5 percent) as lower government bond rates and reduced government financing needs push banks to increase their lending book

Profitability should rise on further declines in non-performing loans and continued high capitalization ratios.

Other recent QNB Economic Insight reports include China, India, Indonesia, Saudi Arabia, Kuwait, Oman, Qatar and the UAE and are available on the QNB Group website.

QNB Group operates in more than 27 countries across 3 continents and its economic reports leverage its knowledge of these markets to provided added value for its clients and counter parties.