Annual data2008(a)Historical averages (%)2004-08Population (m)6.1Population growth3.2GDP (US$ bn; market exchange rate)20.0Real GDP growth6.7GDP (US$ bn; purchasing power parity)30.3Real domestic demand growth7.7GDP per head (US$; market exchange rate)3,291Inflation6.6GDP per head (US$; purchasing power parity)4,974Current-account balance (% of GDP)-11.2Exchange rate (av) JD:US$0.709(b)FDI inflows (% of GDP)12.8(a) Economist Intelligence Unit estimates. (b) Actual.

Background: Transjordan gained independence from the UK in 1921, and became the Hashemite Kingdom of Jordan in 1946. King Abdullah, Jordan's ruler since 1921, was assassinated in Jerusalem in 1951. He was succeeded briefly by his son, Talal, and then by his grandson, Hussein, who ruled until his death in 1999. His son, Abdullah, then became king. Jordan has fought two wars against Israel, culminating in the loss of the West Bank and East Jerusalem in 1967. The two countries signed a peace deal in 1994. Jordan has been pursuing a programme of progressive economic liberalisation since the late 1980s, but the pace of reform has accelerated under the rule of King Abdullah II.

Political structure: Jordan is an absolute monarchy tempered by constitutional conventions. The king is responsible for foreign policy, sets the country's strategic direction and appoints the prime minister. The government is scrutinised by an elected Chamber of Deputies, which has the power to reject legislation, and an appointed Senate. Political parties are legal but generally less important than the tribal or family background of politicians, with the possible exception of the Islamic Action Front, the political wing of the Muslim Brotherhood.

Policy issues: Jordan has been undergoing economic stabilisation and liberalisation since a debt crisis in 1988-89. Progress has been mixed and has been affected by major regional events such as the 1991 and 2003 wars in Iraq. A National Agenda, developed under King Abdullah's direction, was set in 2005 and provides a blueprint for Jordan's economic, social and political development over the coming decade. It calls for continued economic reform, a streamlined bureaucracy, and a stronger role for the private sector.

Taxation: A general sales tax was introduced for the first time in 1994; the rate has been progressively raised (it currently stands at 16%) and its coverage has been extended. The income tax rate is progressive, up to a maximum of 25%. Corporation tax is divided into three bands, with the bulk of companies taxed at a rate of 15% or 25%, and financial services firms paying a higher rate of 35%.

Foreign trade: Jordan has a large structural trade deficit (US$6.3bn in 2007), despite robust export growth in recent years, largely owing to the strength of global oil prices since 2003. The widening trade deficit has been a major factor in the deterioration of the current account, which moved from a surplus of US$1.2bn in 2003 to a deficit of US$2.8bn in 2007.

Major exports 2008% of totalMajor imports 2008% of totalManufactured goods23.8Machinery&transport equipment26.5Chemicals17.7Crude oil&petroleum products21.2Crude materials17.9Manufactured goods20.3Food&live animals9.2Food&live animals15.9    Leading markets 2008% of totalLeading suppliers 2008% of totalUS13.8Saudi Arabia24.9Iraq11.6China12.0UAE7.0Germany8.0India6.7US6.9