Jordan’s economic resilience earns IMF recognition

Between April 6 and 17, 2025, Jordan welcomed an important economic milestone: the visit of an International Monetary Fund (IMF) mission to Amman to conduct the third review under the Extended Fund Facility (EFF) program and to engage in discussions regarding the Resilience and Sustainability Facility (RSF). The mission concluded with a staff-level agreement with the Jordanian authorities, signaling the country's steadfast commitment to sound economic policies and structural reforms, despite ongoing regional and global challenges. Upon final approval by IMF management and the Executive Board, Jordan will unlock approximately 97.784 million Special Drawing Rights (SDR)  (around $130 million) as part of the previously agreed total of SDR 926.370 million (about $1.2 billion).

The IMF’s findings reaffirm the strength of Jordan’s economic program, which has continued to perform well despite external shocks. The economy achieved a real GDP growth rate of 2.5 per cent in 2024, with expectations of further strengthening to 2.7 per cent in 2025, supported by the rebound in domestic demand, a recovering tourism sector, and rising investment inflows. Inflation has remained contained at approximately 2 per cent.

The IMF also noted that the current account deficit widened to 5.9 per cent of GDP in 2024, largely due to reduced tourism revenues. However, the deficit is forecasted to narrow to 5.5 per cent in 2025, bolstered by improved tourism earnings and stronger export performance. The Central Bank of Jordan’s prudent monetary policies, particularly its steadfast maintenance of the dinar’s peg to the US dollar, have played a crucial role in preserving monetary stability, further supported by robust international reserves.

In addition, the IMF commended Jordan’s fiscal efforts to gradually bring public debt down to around 80 per cent of GDP by 2028, while continuing to prioritize social and development spending and improving fiscal efficiency.

Against this backdrop, Jordan’s economy shows strong fundamentals, providing resilience against global trade tensions and the potential impacts of higher tariffs. Major national projects, including the National Water Carrier Project, are expected to further boost growth prospects.

Complementing the IMF’s assessment, recent data released by Jordan’s Department of Statistics for the fourth quarter of 2024 paints a similarly positive picture. The economy grew by 2.7 per cent compared to Q4 2023, resulting in a full-year growth rate of 2.5 per cent at constant prices — notably higher than the 2.3 per cent forecast cited in the 2025 budget speech.

Examining sectoral performance, agriculture led with a remarkable 8.4 per cent growth rate, reflecting the effectiveness of government initiatives aimed at revitalizing this critical sector. This was followed by the manufacturing sector (4.9 per cent), extractive industries (4.5 per cent), and electricity and water supply (4.2 per cent). The services sectors also recorded healthy gains, with transportation, storage, and communications growing by 3.7 per cent, and wholesale and retail trade, hotels, and restaurants expanding by 3.1 per cent during the same period.

In terms of contributions to GDP, the manufacturing sector accounted for the largest share at 18.7 per cent, followed by finance, insurance, and real estate at 17.2 per cent, and government services at 14.8 per cent. As for contributions to the 2.7 percentage points of total GDP growth in 2024, manufacturing led with 0.90 points, agriculture added 0.53 points, and transportation, storage, and communications contributed 0.33 points.

Such performance stands as a strong testament to the success of the government's policies in reinforcing the resilience of Jordan’s economy against a backdrop of regional instability throughout 2024.

The industrial production index also showed encouraging trends, recording a 4.11 per cent increase in February 2025 compared to February 2024, and cumulative growth of 3.43 per cent over the first two months of 2025. Meanwhile, the producer price index remained stable, with a slight decrease of 0.17 per cent year-on-year in February 2025, helping to keep inflation at manageable levels.

Looking forward, these achievements position Jordan strongly to reinforce its role within the region. With neighboring countries such as Lebanon, Syria, and Egypt urgently seeking constructive economic partnerships, Jordan’s proven economic resilience — as validated by both the IMF and international credit rating agencies — provides a strong foundation for promoting the country as a secure and attractive investment destination. This comes at a particularly important time following a decline in foreign direct investment last year. Jordan’s proven ability to manage crises effectively and maintain macroeconomic stability amid geopolitical uncertainties offers it a strategic advantage in attracting investment and deepening regional economic integration — a critical pathway toward sustainable growth in the years ahead.

Finally, it is essential to commend the determined efforts of the Jordanian government, led by Prime Minister Jaafar Hassan and the economic team, whose latest official visit to Washington, D.C., aimed at strengthening economic ties with the United States. The visit focused on negotiating reductions in customs tariffs on Jordanian exports and included high-level meetings with senior officials from both the IMF and the World Bank to further support Jordan’s ongoing economic reform efforts. These proactive steps highlight Jordan’s commitment to leveraging its resilient economy to expand global partnerships, attract greater investment, and advance sustainable development objectives.