Shehadeh underlines ‘solid’ Amman-Washington political, economic relations, says gov’t seeks to double bilateral trade

AMMAN — Minister of State for Economic Affairs Muhannad Shehadeh has affirmed the deep Jordan-US political and economic relationship, emphasising the pivotal role of the bilateral Free Trade Agreement (FTA) in solidifying the partnerships between the two countries.

The minister highlighted the FTA's positive impact, generating a $3.1 billion trade surplus for Jordan and facilitating a $5 billion two-way trade flow.

Speaking at a forum hosted by the "Amman Group for Future Dialogues," Shehadeh stressed Jordan's strategic intent to deepen this economic partnership with the US across various verticals, with a target of increasing trade exchange to $10 billion, the Jordan News Agency, Petra, reported.

“This ambition aligns with leveraging dynamic shifts in the global trade landscape,” he said, citing the “constructive” visit Prime Minister Jafar Hassan has recently made to Washington, where he held high-level talks with key stakeholders within the US administration.

Shehadeh affirmed the Jordanian economy's sustained resilience and macroeconomic stability, notwithstanding significant headwinds from the external environment.
"The Jordanian Dinar remains robust, underpinned by record foreign exchange reserves exceeding $22 billion, providing 11 months of import cover, alongside a substantial strategic gold reserve," he said.

He reiterated that the US dollar's valuation is fundamentally driven by global supply and demand dynamics.

The minister emphasized the government's “unwavering commitment to establishing a “complementary” relationship with the private sector as a catalyst for economic expansion. “This is can be seen in policy initiatives designed to cultivate a business-friendly investment ecosystem and encourage corporate social responsibility aligned with national development objectives.”

He also highlighted the government's belief in the strategic importance of Islamic finance as a key enabler of capital formation and economic development, announcing the launch of t a tradable "Ijara Sukuk" (Islamic lease certificate) to further deepen Islamic capital markets.

Shehadeh highlighted the government's citizen-centric economic strategy, prioritising inclusive and sustainable growth beyond short-term profitability metrics.

He reiterated the government's primary mandate to achieve growth trajectories that demonstrably reduce poverty and unemployment while enhancing aggregate factor productivity.

He also underlined the cross-governmental Economic Modernisation Vision as a core tenet of the government's agenda over the preceding seven months, complemented by 92 targeted economic policy interventions primarily aimed at streamlining processes for citizens and businesses.

“These measures have yielded tangible results, with the economy registering a 2.7 per cent growth rate, exceeding the initial year-end projection of 2.3 per cent.”

The minister also underscored the imperative of export-led growth, citing the previous year's expansion in exports, with the services sector contributing approximately 50 per cent. “This growth was attributed to government incentives, including a 10-year export tax holiday and a reduced 5 per cent income tax rate on export revenues, alongside customs facilitations aimed at bolstering domestic production for international markets.”

He said that the government has also focused on injecting liquidity into the financial system through the expedited disbursement of accumulated tax refunds and the resolution of long-standing tax disputes via penalty waivers, a “strategic economic decision prioritising market dynamism over purely accounting-based considerations, as evidenced by improved growth metrics and enhanced market liquidity.”

Shehadeh affirmed the government's commitment to deploying allocated capital expenditure towards high-impact projects with significant output and employment multipliers, citing in this regard the “prime minister's directive to expedite the implementation of budgeted projects and pursue new strategic investments, with a mid-year budget review slated for July.”

Regarding mega infrastructure projects, Shehadeh said the National Water Carrier is progressing according to schedule with approved financial appendices, and the national railway project, advancing steadily with a projected cost of JD2.3 billion. This railway infrastructure is expected to provide a significant logistical advantage to the Jordan Phosphate Mines Company (JPMC) and Arab Potash Company (APC), enabling production scaling through reduced freight costs.

Shehadeh reiterated the government's firm commitment to optimising public debt management through the issuance of JD 400 million in competitively priced Islamic bonds to refinance approximately $1 billion in maturing Eurobonds in June and July. This strategy leverages previously underutilized Islamic finance instruments, alongside securing concessional financing at favorable interest rates.

He indicated that another $1 billion Eurobond maturity is scheduled for January of the following year, and the government will proactively manage this refinancing operation, aiming to minimize reliance on domestic capital markets and secure lower borrowing costs.