Economists: Jordanian economic indicators support expectations of accelerated growth in 2027

According to the "World Economic Outlook" report released on Tuesday, the IMF projected that Jordan's economic growth would accelerate to 3.1 percent next year, compared to the 2.7 percent projected for the current year, versus a growth rate of 2.8 percent in 2025, an increase of 0.4 percentage points between 2026 and 2027.

These projections coincide with a 3 percent growth in real GDP during the second quarter of this year, compared to 2.8 percent in the same period last year, according to the Department of Statistics, supported by growth in the agriculture sector by 7.8 percent, manufacturing by 6.2 percent, and electricity by 5 percent.

Regionally, the report projected a 2 percent contraction in the Middle East and North Africa economy this year, before recovering to 7 percent growth in 2027, while it projected growth for the group of oil-importing countries, which includes Jordan, at 4.7 percent in both the current and next year.

Economist Hossam Ayesh said that the IMF's projections reflect a gradual improvement in Jordan's economic outlook, with growth likely to rise from 2.7 percent in 2026 to about 3.1 percent in 2027, despite continued regional pressures and high energy prices.

He added that the 0.4 percentage point increase in growth projections for next year, at a time when regional economies are facing increasing challenges, reflects the Jordanian economy's ability to maintain its activity and benefit from the performance of productive sectors, primarily agriculture and industry.

Ayesh pointed out that the IMF's positive outlook is not limited to growth projections but extends to current account and inflation indicators, as the current account deficit is expected to decline from about 7.5 percent of GDP in 2026 to 5.7 percent in 2027, coinciding with a decrease in the inflation rate from 2.5 percent to 2.3 percent.

He explained that these indicators, along with foreign currency reserves, reflect the importance of monetary and financial stability in supporting the national economy and enhancing its ability to deal with external variables, noting that continuing this path requires maintaining the competitiveness of productive sectors and expanding their capacity to generate exports and foreign currency revenues.

For his part, economist Wajdi Makhamreh said that the IMF's projections for Jordan's economic growth of 2.7 percent in 2026, rising to 3.1 percent in 2027, reflect cautious optimism about the national economy's ability to maintain its stability and achieve a gradual recovery, despite the ongoing repercussions of the war in the region and disruptions in global energy and trade markets.

He explained that the 3 percent growth in real GDP during the second quarter of this year provides a positive indicator, supported by the performance of key productive sectors, but continued improvement requires enhancing investment and exports and expanding economic activity capable of creating job opportunities.

He added that the closure of the Strait of Hormuz, the disruption of energy supplies, and rising oil prices pose direct risks to the Jordanian economy, as it is an energy-importing economy, as high energy and shipping costs could lead to increased production and transport costs, and raise the prices of goods and services, putting pressure on household purchasing power and export competitiveness.

Makhamreh noted that the projected rise in inflation to 2.5 percent this year before declining to 2.3 percent in 2027 reflects continued price pressures, although the expected decline provides an indicator of a gradual improvement in the economic environment.

Regarding the external sector, he indicated that the projected rise in the current account deficit to about 7.5 percent of GDP in 2026, compared to 5.6 percent in 2025, represents one of the most prominent challenges, in light of the high energy bill and the potential impact of regional tensions on exports, tourism, and services.

He emphasized the importance of developing exports, attracting foreign investments, and increasing tourism and service revenues to alleviate pressures on the balance of payments and enhance the economy's ability to generate foreign currency.

He pointed out that the projected 2 percent contraction of the Middle East and North Africa economy this year, before the expected recovery in 2027, reflects the scale of risks facing the region, explaining that continued unrest could affect trade, investment, and tourism, while the return of stability could provide opportunities for Jordan to strengthen its position in logistics, transport, and trade.

Makhamreh stressed the need to enhance energy security, accelerate the implementation of investment and productive projects, support manufacturing, agriculture, and digital services, as well as maintain monetary and financial stability, improve the business environment, and link investment incentives to job creation and increasing local value-added.

In turn, financial and economic expert Dr. Mohammed Al-Hadab Al-Sarhan confirmed that the projections of accelerated growth to 3.1 percent in 2027 reflect the national economy's continued ability to grow despite exceptional regional circumstances, noting that the true importance of these projections lies in the extent to which growth can generate exports, job opportunities, and foreign currency.

He explained that monetary and financial stability, the robustness of the banking sector, and continued activity in productive sectors are factors supporting the economy, but achieving more sustainable growth requires strengthening internal drivers, so that increased economic activity is linked to production and investment, not just improved external conditions.

Al-Sarhan pointed out that foreign trade data during the first seven months of this year showed a 10.3 percent increase in total exports, compared to a 4.6 percent growth in national exports and a 67.2 percent increase in re-exports.

He indicated that about 60 percent of the increase in the value of total exports during the period came from re-export activity, which supports trade and logistics, but differs in its productive impact from the growth of locally manufactured exports.

He emphasized that these indicators highlight an opportunity to enhance local value-added through the development of manufacturing, packaging, storage, and export-related services, which expands the benefits for Jordanian companies and labor from the growth of foreign trade and enhances the contribution of local production to increasing exports.

He added that the widening of the projected current account deficit this year, despite continued growth, confirms the economy's sensitivity to energy, shipping, and insurance costs and tourism and service flows, and highlights the importance of increasing national exports, service and tourism revenues, and foreign direct investment.

He pointed out that the 6 percent decrease in the trade balance deficit during the first seven months of this year represents a positive development, and does not conflict with the projection of a widening current account deficit for the year as a whole, due to the difference in the time period covered by the two indicators and the fact that the current account includes broader transactions than commodity trade.

Al-Sarhan explained that enhancing external stability also requires encouraging investments that reduce reliance on imports in an economic and competitive manner, and increase the ability of national companies to expand into foreign markets, achieving a sustainable impact on the balance of payments.

He noted that expanding the production capacity of existing industrial and export companies that have actual markets and purchase orders might achieve faster results than waiting for the completion of the cycle of establishing new investments, suggesting the development of a joint program between economic authorities, banks, and the industrial sector to support companies facing financing, production, or logistical constraints that hinder meeting export orders.

He indicated that providing financing solutions linked to commercial orders and expansion plans, in parallel with connecting companies to local suppliers, could increase local value-added and boost exports and job opportunities, and direct financing toward productive activities that have actual demand in foreign markets.

He also stressed the importance of accelerating the implementation of strategic projects in water, transport, and energy, and monitoring their impact on production costs and industrial competitiveness, especially in light of high oil prices and supply chain disruptions, to reduce the economy's exposure to external shocks.

Al-Sarhan concluded by emphasizing that the projections of accelerated growth represent an opportunity to build on stability and progress in productive sectors, noting that the next phase requires a focus on increasing the economic return from investments in terms of local value-added, job opportunities, exports, and the ability to generate or save foreign currency.

He emphasized the importance of adopting clear indicators to measure the results of major investment projects, including the volume of purchases from Jordanian companies, the percentage of local content in production, actual exports, and jobs created, in a way that helps direct incentives and resources toward investments with the highest impact on the national economy, and in line with the objectives of the Economic Modernization Vision.