(MENAFN- Jordan Times) Once more some newspapers published the announcement by the Department of Statistics on the gross domestic product in the first quarter, under the title, "the economy grew at 3 per cent in the first quarter of this year".
In fact, the Department of Statistics reported growth by comparing the GDP in the first quarter of this year to the GDP in the same period of last year. The 3 per cent growth did not take place in the first quarter; it took place in a full creeping year, three quarters of which fall in 2011 and one quarter in 2012.
However, I shall take this percentage as an indicator of the present growth rate, or the most recent annual growth rate, assuming that, barring surprises, it will continue at this level during the following three quarters of 2012, or be very close.
In any case, the growth rate of 3 per cent that the Department of Statistics found is the same as the government's estimate when it presented the 2012 budget to Parliament, seven months ago, but slightly higher than the various projections made by some international institutions like the International Monetary Fund and the World Bank, and the credit rating agencies like Moody's, and Standard and Poor's, which ranged between 2.1 and 2.8 per cent.
The rate of economic growth presented by the Department of Statistics is calculated in real terms, i.e., after excluding inflation. As far as current prices are concerned, the growth rate is 8 per cent, which means that inflation, measured by GDP deflator is around 4.9 per cent. It is slightly higher than the going inflation rate measured by the cost of living index. The reason for the difference is that some GDP components do not exist in the basket upon which consumer prices are calculated on monthly basis.
Advanced industrial countries consider themselves in a state of economic recession if their GDP registers negative growth rates for two quarters in a row, while we in Jordan consider ourselves in a state of economic recession if the growth rate declines to, say, 3 per cent, even though it remains positive and in excess of the population growth rate, which allows a slight improvement in the per capita income and the standard of living.
Attention may be drawn to the huge variation between growth rates of various sectors of the economy. Some sectors scored high growth rates, such as tourism, as presented by hotels and restaurants, which rose by 14.2 per cent, and electricity and water, which grew by 8.9 per cent in constant prices, while the mining sector - phosphate and potash - sustained a quantitative loss of 1.3 per cent, perhaps due to labour disturbances, such as demonstrations and sit-downs, which may have brought production to a halt for several days.
As far as contribution to the GDP by various sectors is concerned, one may be surprised to find that the biggest sector is that of producers of government services. They get almost one quarter of the GDP.
The second important sector is manufacturing industry, responsible for 17 per cent of the GDP at factor price, i.e., before adding net taxes applicable to products.
A growth rate of 3 per cent is not satisfactory for Jordan whose economy used to grow at much higher rates, but taking into consideration the international crisis in the industrialised world, the financial crisis in Europe and the Arab Spring, one may appreciate the fact that the Jordanian economy is growing at all.
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