capital spending

Exports and Capital Spending Key to Growth – Report

Jordan needs to focus on boosting exports and capital spending if it wants to achieve strong and sustainable growth, according to a new report by the Jordan Strategy Forum (JSF) think tank.

The report analyzed the relationships between capital spending and real GDP growth, exports and real GDP growth, and real GDP growth and employment levels.

According to the study, the impact of real capital spending and exports on real GDP is positive, and the impact of real GDP growth on employment levels is also positive. The study outlined that when capital spending increases, real GDP will increase as well. For example, JD1 of real capital spending will increase real GDP by JD1.14. And JD1 of real exports increases real GDP by JD2.89, and so on.

To realize strong and sustainable economic growth, the JSF made several recommendations.

First, the study stressed the importance of giving exports special attention due to their impact on real economic growth and unemployment. According to the study, Jordan should diversify and increase the sophistication of its export basket.

Second, it emphasized the importance of capital spending in promoting growth, especially on public services like health, education, and transport. It further emphasized that the Jordanian economy must sustain macroeconomic stability because uncertainties have a significant negative impact on growth and employment and real economic growth creates new employment opportunities.

Furthermore, it stressed that the government must prioritize and quantify Jordan’s need for public goods’ investment projects in a comprehensive manner to translate into short-term trust, medium-term jobs and long-term competitiveness, growth, development, and confidence. This must quickly translate into action on the ground to be effective and the financing should also come from the public as well as the private sector.