The economic context of Jordan

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.

Main Sectors of Industry

Agriculture in Jordan accounts for 4.8% of the GDP and employs approximately 3.2% of the workforce, according to the latest data from the World Bank. The country faces challenges in agricultural development due to the scarcity of water, with an agricultural area covering less than one-eighth of its territory. Principal crops include wheat, barley, lentils, tomatoes, cucumbers, eggplant, citrus fruits, olives, strawberries, and grapes. Jordan's natural resources primarily consist of phosphates and potassium. The country has also discovered six uranium deposits. Jordan is a net food-importing country, importing up to 98% of consumable items, including rice, frozen chicken cuts, nuts, fresh apples, cheese, beef, and food preparations. Due to water scarcity, agriculture has been steadily declining as a sector of the overall economy for years. However, in recent years, Jordan's agricultural exports have grown significantly, with vegetables, fruits, and cereals making up nearly 50% of total agricultural export revenue (FAO).

Industry contributes 24.8% to Jordan's GDP and employs around 18.3% of the workforce. Mining and quarrying, particularly of phosphate and potash, are significant industries in the country. The manufacturing sector, however, is relatively limited and dominated by textiles, which has faced challenges due to international competition. Manufacturing as a whole is estimated to represent about 17% of GDP. The industrial sector in Jordan saw a real growth of 4% in the first three quarters of 2024 compared to the same period in 2023, according to the Jordan Chamber of Industry (JCI). Key sectors showed positive growth, with mining and quarrying up 4.9%, manufacturing industries rising by 3.8%, and the electricity and water sector increasing by 4.5%.

The services sector is the largest contributor to Jordan's economy, accounting for 60.7% of GDP and employing 78.4% of the workforce. Communication technologies and financial services are particularly active sectors in the country. Distribution and tourism infrastructure also contribute substantially to GDP, although they have experienced some slowdown in recent years. Government services play a significant role in the services sector, contributing 14.9% to GDP and employing 41% of the active population, according to the Jordan Strategy Forum. The tourism sector is also pivotal to the country’s economy: according to the 2024 Annual Tourism Report, the number of international visitors to the Kingdom in 2024 exceeded the target set in the Economic Modernisation Vision (EMV), reaching approximately 6.108 million—13.8% above the projected 5.367 million visitors, despite the exacerbating conflicts in the area.

 

Breakdown of Economic Activity By Sector	Agriculture	Industry	Services
Employment By Sector (in % of Total Employment)	3.2	18.3	78.4
Value Added (in % of GDP)	4.8	24.8	60.7
Value Added (Annual % Change)	5.9	3.5	2.5

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:

64,6/100

World Rank:

69

Regional Rank:

6

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:

5.33/10

World Rank:

65/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Sources of General Economic Information

Ministries

Ministry of Economy, Industry and trade
Ministry of Finance

Statistical Office

Department of Statistics

Central Bank

Central Bank of Jordan

Stock Exchange

Amman Stock Exchange

Economic Portals