Over the past decade, Jordan’s economic approach has not been primarily associated with the traditional concept of high economic growth. Rather, it has been fundamentally centered on preserving macroeconomic stability within one of the world’s most volatile geopolitical and economic environments.
Since 2011, Jordan has faced a succession of external shocks, including large-scale refugee inflows, the closure of trade borders with several neighboring markets, disruptions in global supply chains, the COVID-19 pandemic, global inflationary waves, and escalating regional geopolitical tensions.
Under such conditions, small and open economies typically experience significant imbalances, including exchange rate pressures, sharp increases in inflation rates, declining foreign reserves, and mounting fiscal pressures. Nevertheless, Jordan has largely succeeded in maintaining its core economic balances, indicating that its primary economic achievement over the past decade has not been the attainment of high growth rates, but rather the development of economic and institutional resilience capable of withstanding external shocks.
From this perspective, the past ten years can be viewed as a period of economic and structural groundwork that paves the way for a new phase driven by the Economic Modernization Vision 2033, which aims to accelerate economic growth, stimulate investment, create employment opportunities, and gradually transform Jordan into a more productive and competitive economy.
The Macroeconomy Over the Past Decade: Stability First, Growth Second
Jordan’s economy has witnessed a gradual expansion in economic activity over recent years despite persistent structural challenges. According to estimates by international institutions, nominal gross domestic product (GDP) increased from less than USD 40 billion in the middle of the previous decade to approximately USD 65 billion in 2026. GDP per capita also rose to around USD 5,600, while the economy is projected to achieve real growth of approximately 2.7 percent in 2026, with gradual improvement expected in subsequent years.
However, the slowdown in Jordan’s economic growth rates during the past decade cannot be understood in isolation from the regional and international context, which has been characterized by a series of major and overlapping crises. These include geopolitical instability across the region, refugee-related pressures, disruptions in global supply chains, the COVID-19 pandemic and its subsequent inflationary waves and global monetary tightening, as well as recent geopolitical developments that have directly and indirectly affected trade, investment, and financial flows.
Collectively, these challenges created a highly constrained economic environment that significantly limited development opportunities, both regionally and globally.
Despite these pressures, the Jordanian economy demonstrated a high degree of resilience and adaptability. It succeeded in maintaining positive growth rates and relative stability in key economic indicators, even though these outcomes remained below targeted levels. The significance of these results lies not only in the growth figures themselves, but also in their broader economic implications. They indicate that Jordan has developed an increasing capacity to adapt to shocks and mitigate the effects of crises without falling into severe structural imbalances or prolonged periods of economic contraction.
This achievement becomes even more notable considering that several larger and more resource-rich economies experienced severe stress during recent crises, exposing vulnerabilities within their economic structures. A key factor underpinning Jordan’s resilience has been its long-term economic planning approach and its clear vision for reform and modernization, which have enhanced the economy’s ability to manage crises and sustain economic activity in an environment characterized by high levels of uncertainty.
Monetary Stability and Monetary Policy: The Cornerstone of Economic Confidence
Monetary stability has been one of the most prominent pillars of Jordan’s economic performance over the past decade and arguably represents its most significant macroeconomic achievement. Its importance lies in its central role in preserving macroeconomic balance and strengthening the economy’s capacity to withstand both domestic and external shocks. At a time when many economies faced severe monetary and financial pressures resulting from global market disruptions, Jordan succeeded in maintaining a stable monetary framework that reinforced confidence in the national economy.
The Central Bank of Jordan has effectively managed monetary policy by maintaining the stability of the Jordanian dinar’s peg to the U.S. dollar. This policy has provided a highly credible nominal anchor that helped stabilize market expectations and limit the transmission of external volatility to the domestic economy. This is particularly important for relatively small and open economies, which are directly affected by fluctuations in capital flows, commodity prices, and global economic developments.
At the same time, Jordanian monetary policy demonstrated a clear ability to contain the global inflationary pressures that emerged in the aftermath of the COVID-19 pandemic, which drove many advanced and emerging economies to record historically unprecedented inflation rates. Balanced monetary measures helped maintain relatively low inflation levels, contributing positively to price stability and preserving the purchasing power of households and businesses. These measures also mitigated the adverse effects of imported inflation on economic activity.
Furthermore, the Central Bank maintained substantial foreign exchange reserves exceeding USD 20 billion. The significance of these reserves extends beyond their nominal value as financial assets, as they constitute one of the most important indicators of the economy’s external strength and serve as the first line of defense against external shocks and volatility in global financial markets. These reserves enhance the country’s capacity to absorb potential pressures on the balance of payments while strengthening confidence in the state’s ability to meet its external obligations and preserve monetary stability.
From a broader economic perspective, exchange rate stability contributes not only to monetary stability but also plays a crucial role in reducing economic uncertainty, lowering investment-related risk premiums, and enhancing the ability of investors and businesses to engage in long-term planning. Moreover, it helps protect individuals’ purchasing power and prevent the erosion of real incomes, thereby contributing positively to the overall business environment and to economic and social stability.
Jordan’s experience in recent years demonstrates that monetary policy has not merely functioned as a tool for managing liquidity or controlling interest rates. Rather, it has served as a strategic pillar for maintaining economic stability and enhancing the resilience of the national economy in an international environment characterized by elevated levels of risk and uncertainty.
Public Finance and Public Debt: The Most Complex Structural Challenge
Despite the improvement witnessed in several macroeconomic indicators in recent years, public finance remains one of the most complex and sensitive issues facing the Jordanian economy. Public debt stands at the forefront of these challenges, representing a long-term structural issue that extends beyond a temporary fiscal imbalance. To a considerable extent, it reflects the cumulative effects of exceptional economic and geopolitical circumstances that have placed increasing pressure on the public budget and constrained the economy’s ability to generate sufficient financial resources at a pace consistent with growing expenditure needs.
Over the past decade, Jordan has encountered a range of factors that imposed additional fiscal burdens, including the repercussions of regional crises, demographic pressures, increased demand for essential services, and slower economic growth, which limited the capacity of public revenues to expand in line with rising financial obligations. Collectively, these factors increased the need for public financing and contributed to higher levels of government indebtedness.
However, the economic assessment of public debt should not be reduced to its absolute size or its ratio to gross domestic product alone, as such indicators provide only a partial picture of fiscal reality. Greater importance should be attached to analyzing the debt structure and composition, its maturity profile, debt servicing costs, financing sources, exposure to interest rate and market risks, and the economy’s ability to generate sufficient growth to absorb this financial burden over the medium and long term.
According to contemporary economic literature, public indebtedness does not become a source of economic risk merely because of its size. Rather, it becomes a concern when an economy enters what is known as an “unsustainable debt dynamic,” a situation in which the effective interest rate on public debt exceeds the economic growth rate for an extended period. Under such circumstances, debt servicing obligations grow faster than national output and income, causing the financial burden to accumulate over time. As a result, public resources become increasingly directed toward debt servicing rather than productive capital expenditure or development spending capable of stimulating economic growth.
From this perspective, the central economic challenge facing Jordan is not to reduce public debt rapidly or directly, but rather to alter the equation of fiscal sustainability by accelerating economic growth and increasing productivity. As long as the economy achieves real growth rates that exceed the average cost of financing, the debt-to-GDP ratio can gradually decline, even while maintaining prudent levels of borrowing. This mechanism has been adopted by many economies seeking to address public debt challenges.
Within this context, the Economic Modernization Vision assumes exceptional importance as a strategic framework for reshaping the national economy. Its success in broadening the productive base, increasing investment, stimulating exports, and strengthening private sector participation could generate a fundamental shift in the trajectory of public finances. Moreover, continued efforts to improve the efficiency of public expenditure, broaden the tax base horizontally rather than increasing tax burdens, enhance tax collection efficiency, and direct spending toward sectors with high multiplier effects are essential elements for strengthening fiscal sustainability and reducing long-term risks associated with public debt.
Industry: From a Resource-Based Economy to a Value-Added Economy
Over the past decade, Jordan’s industrial sector has undergone a qualitative transformation that has enabled it to move beyond its traditional role as a productive sector to become one of the principal drivers of economic growth, exports, and value creation. The significance of this transformation lies in the fact that industry is no longer dependent solely on the utilization of primary resources; rather, it is increasingly driven by knowledge, technology, the growing complexity of production chains, and the expansion of local value added within the production process.
The performance of Jordan’s industrial sector reflects noteworthy structural indicators. Jordan ranked first among Arab countries and twenty-seventh globally in terms of the industrial sector’s contribution to gross domestic product, accounting for more than 24 percent of GDP, according to the classification of the United Nations Industrial Development Organization (UNIDO). This ranking reflects the increasing maturity of the national productive base and the strengthening of backward and forward linkages between industry and other sectors of the economy.
The pharmaceutical, chemical, mining, and food industries provide clear examples of Jordan’s gradual transition toward higher value-added industries with greater capacity to penetrate international markets. The pharmaceutical industry, in particular, stands out as an advanced economic model that demonstrates Jordan’s ability to build competitive advantages based not on abundant natural resources, but rather on human capital, knowledge, and technological capabilities.
In this context, the importance of the industrial sector extends beyond its direct contribution to gross domestic product. It also plays a critical role in increasing total factor productivity, improving the structure of exports, and reducing the economy’s vulnerability to external shocks, making it one of the fundamental pillars of the transition toward a more sustainable and resilient long-term growth model.
Energy Sector: Structural Transformation in Energy Security and the Reconfiguration of External Dependence
The energy sector has been among the areas experiencing the most profound structural transformations within the Jordanian economy over the past decade. Jordan has gradually shifted from a model that relied almost entirely on imported energy to a more balanced framework based on the diversification of energy sources and increased reliance on domestic resources, particularly renewable energy.
Historically, Jordan has been one of the economies most vulnerable to fluctuations in global energy prices. In certain years, the energy bill exceeded 20 percent of gross domestic product, reflecting the country’s heavy dependence on imported oil and natural gas to meet the needs of electricity generation, industrial consumption, and transportation. This pattern created substantial pressures on the balance of payments and heightened the economy’s exposure to external shocks.
However, the past decade has witnessed a structural transformation in the country’s energy security equation, driven by significant expansion in renewable energy projects, particularly solar and wind power. According to official data, renewable energy now accounts for approximately 27 percent of total electricity generation in Jordan, placing the Kingdom among the leading countries in the region in terms of integrating clean energy sources into the national electricity mix. The country’s installed renewable energy capacity has surpassed 2.6 gigawatts from combined solar and wind projects.
This transformation has had a direct positive impact on the macroeconomy by reducing cumulative energy import costs by billions of dollars over recent years, narrowing the current account deficit, and improving cost stability across industrial and service sectors. It has also reduced the economy’s exposure to fluctuations in global oil and gas prices, thereby strengthening macroeconomic resilience in the face of external crises.
From a broader structural perspective, the shift toward renewable energy extends beyond its financial implications to encompass a fundamental reshaping of the growth model itself. It introduces new dimensions related to the green economy, energy efficiency, and investment in sustainable infrastructure. This transition aligns with global efforts to reduce carbon emissions and move toward a low-carbon economy, opening strategic opportunities for Jordan in emerging sectors such as green hydrogen.
Leveraging its geographic location, high levels of solar irradiation, and favorable wind conditions in several regions, Jordan is well positioned to transform the energy sector from a structural cost burden into a key driver of future investment and economic growth.
Prospects for the Jordanian Economy Under the Economic Modernization Vision 2033
The Economic Modernization Vision 2033 represents a fundamental shift in Jordan’s approach to economic management, moving away from a traditional model historically driven by consumption, public expenditure, remittances, and external assistance toward a more sophisticated model led by investment, productivity, and exports. While the previous model contributed to maintaining a degree of economic stability, it remained limited in its ability to generate high and sustainable growth under the constraints of limited resources, demographic pressures, and fiscal challenges.
The Vision is founded on the gradual restructuring of the economy toward a productive model centered on increasing total factor productivity and improving the efficiency of capital, labor, and technology utilization. Consequently, the focus shifts from demand-driven quantitative growth to qualitative growth based on value creation and the development of more sophisticated and competitive sectors.
The Vision seeks to accelerate economic growth, expand investment, enhance the business environment, and create broad employment opportunities. However, its true impact will be measured by its ability to transform the economic structure in favor of export-oriented sectors with high productive content.
Within this framework, the industrial sector—particularly the pharmaceutical, food processing, mining, and technology industries—is expected to serve as one of the principal drivers of the next phase, given its capacity to deepen domestic production linkages and improve the external balance.
The digital economy also represents a strategic driver of future growth. Amid rapid global advances in artificial intelligence and digital services, Jordan has an opportunity to maximize the value of its human capital and establish itself as a regional hub for software development, technology services, and entrepreneurship, thereby enhancing labor productivity and generating high-value employment opportunities.
In the energy sector, structural transformations toward a green economy are expected to deepen further through the expansion of renewable energy, green hydrogen, and energy storage technologies. These developments could transform energy from a structural cost burden into a strategic source of investment and future growth.
Similarly, the tourism sector is expected to focus increasingly on maximizing economic value rather than merely increasing visitor numbers, through the development of medical, cultural, religious, and conference tourism, thereby enhancing its contribution to output and employment.
Nevertheless, the success of this transformation depends fundamentally on the state’s ability to accelerate structural reforms. Comparative experiences demonstrate that implementation gaps often determine the difference between ambitious visions and tangible outcomes. Consequently, institutional effectiveness, regulatory stability, administrative simplification, and improvements in the business environment constitute critical determinants of successful implementation.
The labor market also remains central to the success equation. Persistent skills mismatches between educational outcomes and labor market demands underscore the importance of developing technical and vocational education, as well as digital skills, as prerequisites for enhancing productivity and strengthening competitiveness.
Despite the continued risks posed by geopolitical tensions, fluctuations in energy and food prices, global economic slowdown, and rising financing costs, Jordan enters this phase from a relatively stronger position, supported by monetary stability, robust foreign exchange reserves, a stable banking system, and more advanced infrastructure.
In light of the foregoing, the coming decade represents a strategic opportunity to reposition the Jordanian economy from an economy focused on managing stability to one centered on creating growth. The ultimate measure of success will not merely be the volume of investment attracted, but rather the extent to which these investments contribute to transforming the productive structure toward higher productivity, broader export capacity, more sustainable employment opportunities, and tangible improvements in living standards.
