The Impact of the Balance of Trade Balance and GDP on Total Foreign Reserves: A Case Study of Jordan

Abstract

Through this research, the researchers aim to achieve a main goal, which is to know and determine the positive or negative economic effects of both the net trade balance and the gross domestic product on the total foreign reserves minus gold for Jordan and analyze them through discussing and studying the trade balance and its importance within the balance of payments and determining their role and contribution to the economy within economic literature and theories, in addition to explaining the importance of these economic indicators and their trends in Jordan. To achieve this goal, the theoretical study discussed and studied the trade balance and its importance, as well as the gross domestic product and its relationship to economic growth, and the foreign reserves of countries minus gold and their risk management.

The researchers tested the effect of both the trade balance and the gross domestic product on the total foreign reserves, minus gold, for Jordan during the period 2000–2022, using annual data and a regression model using the SPSS program. The researchers concluded that there was no statistically significant effect of the net trade balance on the total reserves. Foreign reserves minus gold for Jordan, and there is a statistically significant positive effect of the gross domestic product on the total foreign reserves minus gold for Jordan during the period studied.