Economic Outline

Economic Indicators

Jordan has demonstrated impressive resilience, maintaining stability and growth despite regional and global crises. This resilience resulted from the authorities' continued pursuit of sound macroeconomic policies and reform progress over the past several years, as well as significant international support. However, as regional conflicts continued and expanded, they increasingly impacted Jordan’s economy, dampening growth and affecting government finances. Growth was estimated to have moderated to 2.3% in 2024, down from 2.7% in 2023. While this was only a slight decrease from earlier projections, the composition of growth shifted, with stronger net exports compensating for weaker domestic demand. Growth is expected to remain subdued in 2025, at 2.5%, but is projected to pick up in the following years, assuming a resolution to the conflict and continued sound macroeconomic policies and reforms. However, risks to the outlook remained high (IMF).

Since the pandemic, Jordan has made notable progress in fiscal consolidation despite facing external shocks and financial losses from public utilities. Public debt rose to nearly 90% of GDP by end-2023, up from 74.3% in 2018. High poverty, unemployment, and the need for social support, along with significant development and infrastructure needs, including climate change mitigation, continue to put pressure on public finances. Nevertheless, to ensure debt sustainability, the central government reduced the primary deficit from 5.7% of GDP in 2020 to 2.7% in 2023. In 2024, government revenues were significantly affected by weaker domestic demand and a sharper-than-expected decline in the prices of key export commodities, leading to a recalibration of fiscal targets. The overall general government primary deficit (excluding grants) remained largely unchanged at 1.3% of GDP, compared to 1.4% in 2023, with public debt projected to stay just above 90% of GDP by the end of 2024. Despite ongoing external challenges, the authorities remain focused on reducing public debt to 80% of GDP by 2028 (from an estimated 91.7% in 2024), while being mindful of the substantial debt service obligations in the years ahead. The Central Bank of Jordan (CBJ) is committed to maintaining monetary stability and its exchange rate peg to the U.S. dollar. With low inflation and expectations, the CBJ has lowered its policy rate in line with the U.S. Federal Reserve. Inflation is projected to be around 2% in 2025, from 2.1% in 2024 (data IMF).

Jordan faces significant challenges such as high unemployment, accessibility to affordable basic goods and services, and economic inequality. In addition to Palestinian refugees, Jordan has been contending with a substantial influx of refugees, notably from Syria, which could further strain already limited resources. Jordan also has to deal with a high unemployment rate, at around 21% in 2024 (IMF), a high poverty rate and high levels of inequality. Unemployment affects university degree holders and women much more negatively, further contributing to inequalities.

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