Economic and Political Overview

flag Jordan Jordan: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

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 , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture in Jordan accounts for 4.8% of the GDP and employs approximately 3% 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, lentil, tomato, 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, which account for 3% of the world's reserves, and has signed numerous international agreements in the field of atomic energy.

Industry contributes 23.9% to Jordan's GDP and employs around 18% 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 is estimated to represent about 17% of GDP. In the first half of 2023, Jordan's industrial exports grew by approximately 2%, reaching JOD 4 billion, according to the Jordan Chamber of Industry.

The services sector is the largest contributor to Jordan's economy, accounting for 60.4% of GDP and employing 79% 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. Tourism revenue in Jordan increased to JOD 7,409.7 million in 2023, representing a 27.4% year-on-year increase, with 6,353,800 visitors welcomed during the year, as reported by the Central Bank. The construction and transport sectors are also expanding consistently. 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.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.2 17.6 79.1
Value Added (in % of GDP) 4.7 24.5 61.2
Value Added (Annual % Change) 3.3 3.3 2.2

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Jordanian Dinar (JOD) - Average Annual Exchange Rate For 1 MUR 0.020.020.020.020.02

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

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:

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

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Jordan is very open to international trade, so much so that there is a dependence on foreign capital; however, its relative share of GDP has diminished considerably after 2014 and is estimated at 86% (World Bank, latest data available). Exports are spearheaded by the textile industry, followed by the chemical and mining sectors (fertiliser, medicine, potash and phosphate). Jordan mainly imports petroleum oils, gold, motor cars, and fabrics (data Comtrade).

The United States was by far the main destination for Jordanian exports (20% of all exports in 2022), followed by India (14.6%), Saudi Arabia (9.9%), Iraq (7.5%), Indonesia (2.7%), and the United Arab Emirates (2.7%). On the other hand, China (15.3%), Saudi Arabia (14.9%), United Arab Emirates (7.8%), United States (5.5%), India (5.1%) were the main suppliers in 2022 (data Comtrade). Jordan is a member of the WTO and signed a free-trade agreement with the U.S in 2001, allowing the removal of customs duties on the majority of goods and services since 2010 when it was fully implemented. Jordan has also signed an Agreement of Association with the EU. In addition to the United States, Jordan is also party to bilateral trade agreements with Canada and Singapore and is a signatory to several regional trade agreements including the European Free Trade Association (Norway, Switzerland, Liechtenstein), Greater Arab Free Trade Agreement (GAFTA), and Aghadir Agreement (Egypt, Morocco, Tunisia) which is connected to the Association Agreement (EU).

Jordan's trade balance is structurally in deficit, mainly because of the country's reliance on hydrocarbon imports. The exports of goods amounted to USD 12.3 billion and the imports to USD 27.2 billion in 2022, up by 32.3% and 26.6% year-on-year, respectively (data WTO). However, the country is a net service exporter (USD 7.9 billion in exports against USD 5.7 billion in imports in 2022). According to the Jordan Department of Statistics, the value of exports in the first eleven months of 2023 reached JOD 8,221 million (of which 615 million of re-exports), whereas imports stood at JOD 16,952 million.

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 19,17017,23321,54227,36425,470
Exports of Goods (million USD) 8,3177,9439,35812,78012,763
Imports of Services (million USD) 4,9113,0954,1545,6795,971
Exports of Services (million USD) 7,8532,5014,5127,95510,428
Imports of Goods and Services (in % of GDP) 49.2n/an/an/an/a
Exports of Goods and Services (in % of GDP) 36.7n/an/an/an/a
Trade Balance (million USD) -8,735-7,386-9,810-11,895n/a
Trade Balance (Including Service) (million USD) -5,793-7,980-9,452-9,619n/a
Foreign Trade (in % of GDP) 85.8n/an/an/an/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
United States 22.3%
India 14.1%
Saudi Arabia 9.5%
Iraq 7.3%
Indonesia 2.7%
See More Countries 44.1%
Main Suppliers
(% of Imports)
2022
China 15.2%
Saudi Arabia 15.1%
United Arab Emirates 7.8%
United States 5.5%
India 5.1%
See More Countries 51.3%

Source: Comtrade, Latest Available Data

 
 

Main Products

12.8 bn USD of products exported in 2022
Special garments for professional, sporting or...Special garments for professional, sporting or other purposes, n.e.s., knitted or crocheted 16.5%
Mineral or chemical potassic fertilisers (excl....Mineral or chemical potassic fertilisers (excl. those in tablets or similar forms, or in packages with a gross weight of <= 10 kg) 11.6%
Natural calcium phosphates and natural aluminium...Natural calcium phosphates and natural aluminium calcium phosphates, natural and phosphatic chalk 8.4%
Articles of jewellery and parts thereof, of...Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal (excl. articles > 100 years old) 5.3%
Diphosphorus pentaoxide; phosphoric acid;...Diphosphorus pentaoxide; phosphoric acid; polyphosphoric acids, whether or not chemically defined 5.2%
See More Products 52.9%
27.4 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 8.3%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 7.6%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 5.0%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 4.1%
Fabrics, knitted or crocheted, of a width of > 30...Fabrics, knitted or crocheted, of a width of > 30 cm (excl. warp knit fabrics "incl. those made on galloon knitting machines", those containing by weight >= 5% of elastomeric yarn or rubber thread, and pile fabrics, incl. "long pile", looped pile fabrics, labels, badges and similar articles, and knitted or crocheted fabrics, impregnated, coated, covered or laminated) 2.4%
See More Products 72.6%

Source: Comtrade, Latest Available Data

 
 

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Main Services

8.0 bn USD of services exported in 2022
72.93%
19.21%
1.94%
1.54%
1.48%
1.37%
0.86%
0.32%
0.20%
0.16%
5.7 bn USD of services imported in 2022
56.75%
25.85%
11.13%
2.03%
1.46%
1.06%
0.62%
0.58%
0.41%
0.10%

Source: United Nations Statistics Division, Latest Available Data

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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
Search Engines
Baladna
Google Jordan
Economic Portals

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Political Outline

Current Political Leaders
King: Abdullah II (since 7 February 1999) – hereditary
Prime Minister: Bisher Al-Khasawneh (since 12 October 2020)
Next Election Dates
House of Representatives: 2024
Main Political Parties
Jordan is an absolute monarchy and the parliament maintains a limited role in the governance of the country. Political parties were not legalised in the country until 1992. The Islamic Action Front (IAF), a right-wing opposition force and a faction of the Muslim Brotherhood in Jordan, dominates political spheres and obtained 15 seats in the 2016 elections, after having boycotted the previous two in 2010 and 2013, but only 5 seats at the latest 2020 election. Jordanian politics tend to be influenced by tribal or familial politics rather than by formal political parties. Indeed, at the 2020 general election, wealthy business executives and tribal independents dominated, while strong, reform-oriented members of parliament lost their seats. Broader-based coalitions fared poorly. Less than 10% of the 130 members of the parliament belong to political parties. The most influential opposition party, the IAF, lost almost half of its seats.

Some major parties include:

- Islamic Centrist Party: centre, moderate, promotes social reform
- Zamzam: centre-right, Islamic democracy
- National Current Party: centre, nationalist.

Type of State
Jordan is a multi-party parliamentary constitutional monarchy.
Executive Power
The head of state is the King. The monarchy is hereditary. The King enjoys executive powers. The King signs and executes all laws. He appoints and dismisses all judges by decree, approves amendments to the constitution and has the right to declare war. The King appoints the Prime Minister as head of the government, having no fixed term of office. The cabinet, led by the Prime Minister, is appointed by the King.
Legislative Power
The legislature is bicameral in Jordan. Its parliament consists of: the Senate having 65 members who are appointed by the King to serve four-year terms; and the House of Representatives having 130 members elected by popular vote on the basis of proportional representation to serve four-year terms. The King’s power of veto may be overridden by a two-thirds vote of both houses of the National Assembly.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
129/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
6/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Jordan, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: April 2024