Jordan flag Jordan: Economic outline

Economic Outline

Economic Indicators

The Jordanian economy, severely impacted by the refugee influx and grown increasing dependence on international grants that followed the Syrian and subsequent refugee crisis, had to deal with the global effect of the COVID pandemic.  Nevertheless, its GDP growth amounted to 2.2% in 2021 and 2.5% the following year. Last year, the country’s economy grew an estimated 2.6% according to the IMF, supported by private consumption. The IMF outlook points to a growth rate of 2.7% in 2024 and 3% the following year, although the Israel-Hamas conflict may jeopardize Jordan’s growth prospects. The risk of the conflict directly threatening Jordan's exports, energy, water, or food supply is mitigated by long-term gas contracts, alternative trade routes, supply arrangements, and strategic reserves of fuel and wheat. Nevertheless, growth might decelerate in 2024 due to heightened political uncertainty and expected decreases in tourism inflows, particularly from the U.S. and Europe.

Jordan is one of the few countries in the Middle East that does not rely as much on its natural resources due to scarcity of hydrocarbon and water resources. Nevertheless, it is also one of the most committed countries to financial reforms within its region (privatisation, tax reforms, opening of the banking sector, etc.). Fiscal consolidation should persist in accordance with IMF program goals. Economic expansion and tax collection reforms, such as e-invoicing and track-and-trace measures for alcohol, are projected to boost tax revenues (constituting 70% of total revenues). External grants are forecasted to hit 2% of GDP in 2024, notably with the US, Jordan’s primary external contributor, elevating its aid to USD 1.45 billion annually for 2024-2029. The IMF estimated the general government deficit at 4.4% of GDP in 2023, with a stable outlook over the forecast horizon. The overall government debt, which consolidates central government debt holdings of the Social Security Investment Fund (SSIF), along with the debt of the Water Authority of Jordan (WAJ) and NEPCO guaranteed debt, stood at 93.8% of GDP at the end of 2023, slightly down from 94.1% in 2022. The IMF anticipates a gradual decrease in debt, with projections indicating it will decline to 89.5% by 2025. Meanwhile, the inflation rate was relatively low in 2023 (2.7%) and should hover around the same percentage in the short term. Overall, Jordan receives substantial financial and technical support from both multilateral and bilateral partners, including recent announcements of financial assistance from the UAE, Germany, and the EU.

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, that rose further to 19.2% by the end of 2022 (World Bank), a high poverty rate and high levels of inequality. Unemployment affects university degree holders and women much more negatively, further contributing to inequalities.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 48.7250.9953.5756.5659.71
GDP (Constant Prices, Annual % Change) 2.42.62.63.03.0
GDP per Capita (USD) 4,3174,4984,7054,9435,185
General Government Balance (in % of GDP) -7.1-6.7-6.8-6.3-5.9
General Government Gross Debt (in % of GDP) 91.891.291.490.387.5
Inflation Rate (%) 4.22.22.72.42.5
Unemployment Rate (% of the Labour Force) 22.90.00.00.00.0
Current Account (billions USD) -3.87-3.58-3.40-2.55-2.43
Current Account (in % of GDP) -7.9-7.0-6.3-4.5-4.1

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Jordanian Dinar (JOD) - Average Annual Exchange Rate For 1 GBP 0.960.910.950.880.91

Source: World Bank, 2015

 

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Latest Update: April 2024

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