Preliminary Estimates of the Gross Domestic Product  (GDP) for the First Quarter

2007 (and a Summary of the Economic Situation)

The Department of Statistics (DoS) has announced the preliminary Gross Domestic Product (GDP) estimates for the first quarter of 2007 Q/1-2007). The estimates, based on short-term  macroeconomic indicators, cover all the Kingdom’s economic activities and provide significant information about the economy in the short term. With the end of Q/1-2007, the picture has become clearer about estimates for that quarter. The following report sheds light on GDP developments during Q/1-2007 as compared with those during Q/1-2006.

Q/1-2007 GDP growth, compared with Q/1-2006

The preliminary estimates reveal a GDP increase of 5.9% in fixed prices and a growth rate of 12.9% in market prices during Q/1-2007, compared with Q/1-2006. During Q/1-2007, the GDP stood at JD 2,513.0 million, compared with JD 2,225.2 during Q/1-2006.   

Most of the country’s economic activities witnessed varying degrees of growth. The fastest growing sector was that of Net Taxes on Products, followed by the Financial Services, Insurance and Business Services Sector, the Construction Sector, the Personal and Social Services Sector, the Water and Electricity Sector, the Wholesale and Retail Sector, and the Transport, Storage and Communications Sector. The Quarrying Sector, however, sustained a decline during Q/1-2007.

The following chart shows the growth of different economic sectors during Q/1-2007.

Summary of the Economic Situation 

During the years 2002–2007, the first quarters witnessed economic growth averaging 6.3%, the lowest limit was 4.0% during Q/1-2003 and the highest limit was 8.1% during Q/1-2004. Growth rates during the first quarters of 2005 and 2006 then slowed down and finally settled at 5.9% during Q/1-2007. For the year 2006, however, the growth rate stood at 6.4%. The following chart shows Q/1 growth rates for the years 2002–2007 against the average rate for that period.

The Q/1-2007 inflation rate in consumer prices stood at 8.2%, compared to 4.4% during Q/1-2006. The unemployment rate, however, declined from 14.4% during Q/1-2006 to 14.3% during the same quarter in 2007.  

National exports during Q/1-2007 rose by 15.9% and constituted 31.6% of the Q/1-2007 GDP (against 30.8% during Q/1-2006). At the same time, Q/1-2007 imports rose by 3.5% and constituted 81.8% of the GDP (against 89.3% in Q/1-2006). As a result, the balance of payments deficit decreased by 8.4% and constituted 43.2% of the Q/1-2007 GDP (against 53.3% during Q/1-2006).

On the other hand, the Q/1-2007 industrial production index stood at 145.64 (against 145.29 during Q/1-2006), i.e., an increase of 0.24%. The Q/1-2007 industrial producers price index stood at 143.18 (against 126.88 during Q/1-2006), i.e., an increase of 12.8%.  

The following table shows Q/1 economic indicators during the years 2002–2007.

Contribution of the different economic sectors to Q/1-2007 growth

Following up on the different economic sectors’ performance and contribution to the Q/1-2007 economic growth rate, in comparison with Q/1-2006, one observes that the Net Taxes on Products Sector achieved the highest absolute growth in fixed prices, growing by 11.8%. This was a result of growth achieved mainly in taxes on imports (10.4%) and taxes on industrial products (18.6%). This sector’s contribution to the Q/1-2007 GDP amounted to 12.1% (i.e., 1.4 percentage points) .

 This is followed by the Finance, Banking, Insurance and Real Estate Sector, which grew by 7.9% in fixed prices. Financial, insurance and Business Services reported a growth rate  of 14.8%, while the Real Estate grew by 4.0%. Based on these growth rates, the Financial, Banking, Insurance and Real Estate Sector constituted 17.9% of the Q/1-2007 GDP, with a relative share of 1.4 percentage points.

 This is followed by the Construction Sector, which grew by 7.2% in fixed prices. This was the result of growth of 14.4% in the organized construction sector and 2.2% in the non-organized sector. In the light of these growth rates, the share of the Construction Sector in the GDP rose to 3.9% during Q/1-2007, i.e., a contribution of 0.3 percentage points.

The Personal and Social Services Sector grew by 7.0% and contributed 3.4% to the GDP, i.e., a participation of 0.2 percentage points. This sector is followed by the Water and Electricity Sector, which grew by 7.0% and contributed 2.3% to the GDP, i.e., a participation of 0.2 percentage points.

During Q/1-2007, the Wholesale, Retail, Restaurants and Hotels Sector grew by 6.0%. This was partly attributed to a growth of 6.6% in the wholesale and retail activities. The hotel and restaurant activities, however, receded by 1.5%. This sector’s share of the Q/1-2007 GDP amounted to 9.2%, a contribution of 0.6 percentage points of the total growth for that quarter.

During Q/1-2007, the Transport, Storage and Communications Sector grew by 5.6% in fixed prices. The most important activities that contributed to this growth were air transport (12.1%) and transport-related services (11.1%). Communications, on the other hand, grew by 13.2%. On the basis of these growth rates, the Transport and Communications Sector’s contribution to the Q/1-2007 GDP amounted to 16.6%. Thus, this sector contributed 0.9 percentage points to the total Q/1-2007 growth rate.

 The Government-Services Producers Sector grew by 5.0%, with a contribution of 13.4% of the GDP and a participation of 0.7 percentage points of the Q/1-2007 growth rate.

In comparison with Q/1-2006, the Manufacturing Sector achieved a modest growth of 2.7% in fixed prices. This was attributed to a decline in activities of relatively high importance, i.e., Clothes and Textiles Manufacturing and Food Industries, which declined by 2.9% and 0.5% respectively. The other activities that achieved this modest growth in the Manufacturing Sector were the Wood, Paper and Printing industry, which grew by 9.0%, the Petroleum Industries (3.8%), the Metals Industry, except machinery and equipment (10.0%), the Rubber and Other Non-Metal Industries (0.2%) and other industries (9.1%). Despite the modest growth achieved by this sector during Q/1-2007, its contribution to the GDP did not decline significantly in comparison with Q/1-2006 (17.4% in comparison with 18.0%).

The Manufacturing Sector’s contribution to the economy’s growth during Q/1-2007, which is measured by the ratio of the sector’s size to its absolute growth, amounted to 0.5 percentage points of the total growth of 5.9%.

Some of the other sectors witnessed varying degrees of growth. The Non-Profit and Domestic Services Producers Sector grew by 2.3%, while the Agricultural Sector grew by 0.3%. At the same time, the Quarrying Sector declined by 2.0%. 

The following chart shows the contribution of the most important economic sectors (in percentage points) to Q/1-2007 growth.