Jordan's economy shows signs of maturation as industrial, financial sectors lead Q1 growth

AMMAN — The national economy is showing strong signs of structural maturation in early 2025, buoyed by notable performances in the industrial and financial sectors, according to recent data.

Despite a challenging global and regional environment, the Kingdom has maintained steady economic progress, with first-quarter figures pointing to a strategic shift toward value-added industries, technological adoption, and enhanced domestic productivity, the Jordan News Agency, Petra, reported, citing experts.

Corporate earnings from the Amman Stock Exchange (ASE) underscore this momentum. Aggregate net profits for listed companies rose by 7.6 per cent year-on-year in Q1 2025, reaching approximately JD565 million. The financial sector led the surge, posting JD365.5 million in profits, followed by the industrial sector at JD161 million. The services sector also reported positive results, with earnings of JD34.7 million.

Economists see this widespread growth as “evidence of a deeper transformation within the economy, moving towards innovation and value creation.” Export figures for the industrial sector support this view, with a 4–7 per cent rise in Q1 despite a global economic slowdown. The gains reflect long-term policies aimed at transitioning from commodity-based outputs to advanced manufacturing.

A recent report by the United Nations Industrial Development Organization (UNIDO) highlighted Jordan's growing technological sophistication and increased local value-added content in manufacturing—metrics in which the Kingdom has now outpaced some regional peers.

Iyad Abu Haltam, a representative of the industrial sector, credited the growth to sustained investment in human capital, an improved business environment, and government initiatives supporting digitisation and modernisation. He noted a significant shift in industrial composition, with extractive industries now comprising less than 23 per cent of exports, while knowledge-based manufacturing continues to expand.

However, Abu Haltam stressed the need for further diversification of export markets and support for small- and medium-sized enterprises (SMEs) under the new national industrial policy to maintain momentum.

In the financial sector, stability was reflected in the ASE general index, which rose by 1.52 per cent in Q1. Omar Gharaibeh, an analyst at Al Bayt University, attributed the performance to the Central Bank of Jordan’s (CBJ) consistent and cautious monetary policy, which has effectively balanced economic growth and exchange rate stability.

Sub-sector performance also improved, with the insurance index climbing 4.07 per cent and banking rising 1.88 per cent, thanks to improved operational efficiency, strong credit markets, and a supportive regulatory framework. In contrast, the real estate and diversified financial services sectors saw modest headwinds due to market volatility and interest rate pressures.

Macroeconomic indicators further support the positive trend. Economist Hussam Ayesh noted that Q1 local revenues reached JD1.444 billion, driven by strong tax collections. The banking sector posted a 7.2 per cent rise in profits year-on-year, reaching JD251 million, while deposits exceeded JD47 billion and credit facilities passed JD35 billion, reflecting efficient liquidity management.

Tourism and remittances also bolstered foreign reserves, which surpassed $22 billion in early 2025. These developments, Ayesh said, have given monetary policymakers considerable flexibility.

International financial institutions have taken note. Credit rating agencies, including Fitch, affirmed Jordan’s long-term foreign currency rating at BB- with a stable outlook. Investment and finance expert Haider Majali said this reflects global confidence in Jordan’s creditworthiness, even amid regional instability and global economic headwinds.

“The stability in Jordan’s credit rating highlights the country's ability to meet its debt obligations,” Majali told The Jordan Times, citing the strength of the banking sector, availability of financing, and ongoing international support.

He added that this rating is reinforced by the availability of financing for the local economy, the strength of the banking sector and the continued international support to the Kingdom, as Jordan has maintained its economic stability despite high public debt, limited growth, and high current account deficit.