Economics

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ijcrb.webs.com

FEBRUARY 2013
VOL 4, NO 10

INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

Impact of inflation and unemployment on Jordanian GDP
Dr Mahmoud Ali Jaradat AL Albayet University
Abstract This paper focus on Impact of inflation and unemployment on Jordanian GDP. Literature is cited relevant to inflation and unemployment. Data analysis is done and concusions are drawn on the basis of discussion. Keywords: Impact ; Inflation ; Unemployment ; Jordanian GDP Introduction Problems of inflation and unemployment are the most important problems that affect the growth of Jordanian economy. in this paper I will present the concept of both inflation and

unemployment in general as stated in previous studies and some economic theories that deal with these problems and their impact on GDP . According to jordan economy profile in mundi index, Jordan’s economy is among the smallest in the Middle East, with insufficient supplies of water, oil, and other natural resources, underlying the government's heavy reliance on foreign assistance. Other economic challenges for the government include chronic high rates of poverty, unemployment, inflation, and a large budget deficit. Since assuming the throne in 1999, King ABDALLAH has implemented significant economic reforms, such as opening the trade regime, privatizing state-owned companies, and eliminating most fuel subsidies, which in the past few years have spurred economic growth by

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FEBRUARY 2013
VOL 4, NO 10

INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

attracting foreign investment and creating some jobs. The global economic slowdown, however, has depressed Jordan's GDP growth. Export-oriented sectors such as manufacturing, mining, and the transport of re-exports have been hit the hardest. The Government approved two supplementary budgets in 2010, but sweeping tax cuts planned for 2010 did not materialize because of Amman's need for additional revenue to cover excess spending. The budget deficit is likely to remain high, at 5-6% of GDP, and Amman likely will continue to depend heavily on foreign assistance to finance the deficit in 2011. Jordan's financial sector has been relatively isolated from the international financial crisis because of its limited exposure to overseas capital markets. Jordan is currently exploring nuclear power generation to forestall energy shortfalls According to wikipedia site ,stated that Jordan's economy continues to struggle, weighed down by a record deficit of $2billion this year. Inflation in Jordan has risen by 1.5% to 6.1% in December 2010, and unemployment and poverty have become rampant, estimated at 12% and 25% respectively. Yusef Mansur,(2011):stated that, Jordan today stands at a crossroad, with four economic challenges -unemployment, poverty, inflation and corruption - that need to be addressed with ingenuous swiftness. Failure to do so or a laggard, relaxed, attitude will not only destroy opportunities that may arise from the temporal doom of other economies in the region but also bring unwarranted consequences domestically, There are the four challenges that need to be tackled: - The inflation rate in Jordan in 2010 was 5 per cent, up from -.7 per cent in 2009 and down from 13.9 per cent in 2008. According to the Food and Agriculture Organization, basic food prices will likely rise by 50 per cent this year, prompted in part by rising fuel prices and the falling US dollar.

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318

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FEBRUARY 2013
VOL 4, NO 10

INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

Jordan, an importer of 86 per cent of its caloric intake and 96 per cent of its energy needs, will see a strong inflationary pressure this year. The poor spend over 40 per cent of income on food and fuel; hence, their spending power...
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