IMF: Reforms and tourism recovery support Jordanian economy growth

The maintaining of Jordan's growth forecasts comes as the Fund cut its growth forecasts for the Middle East, North Africa, Afghanistan, and Pakistan economies by 2.7 percentage points, from an expected growth of 1.4% to a contraction of 1.3% during 2026, as a result of the ongoing repercussions of the war and disruptions in energy production and trade.

Resilience of the Jordanian economy

The report noted that Jordan's economic growth has generally maintained a pace close to the levels of the second half of 2025, among a group of economies that included Egypt, Morocco, Pakistan, and Tunisia, which demonstrated resilience against the repercussions of the regional conflict.

The Fund explained that oil-importing economies showed greater resilience compared to oil-exporting countries directly affected by the conflict, supported by strong domestic demand, remittances, tourism activity, and supportive financial conditions.

It projected that economic growth in Jordan will benefit in the medium term from increased infrastructure spending, alongside reforms and macroeconomic stabilization efforts, including reforms under IMF-supported programs, noting that these factors will support growth in a number of regional economies.

It also expected oil-importing economies to benefit from the fading of the shock related to the deterioration of terms of trade, with the continued support provided by remittances and tourism to economic activity.

- Jordan is an exception in trade balance performance

The International Monetary Fund described Jordan as a "clear exception" among the region's oil-importing economies, after merchandise trade balances deteriorated in most of these economies during the past period of 2026, whereas Jordan's trade balance performance was characterized by an improvement driven mainly by strong exports.

In the tourism sector, the Fund affirmed that Jordan witnessed a limited decline in tourism activity during the early stages of the war in the Middle East, before recording a recovery according to the latest data, supported by strong intra-regional travel movement.

It pointed out that tourism in most of the region's oil-importing economies showed resilience, in contrast to the decline witnessed in Gulf economies directly affected by the war.

Regarding monetary policy, the report noted that Jordan adjusted interest rates last September, in parallel with the moves of the US Federal Reserve, among the group of economies whose currencies are pegged to the dollar.

It also noted that Jordanian monetary authorities were among the authorities that warned of the risks of rising inflation driven by energy and food prices and exchange rate pressures, emphasizing the need to be vigilant against the spillover effects of these shocks into broader price increases.

The Fund affirmed its continued engagement in the economic programs supported by it in Jordan, as part of its efforts to provide financing, policy advice, and capacity building for the countries of the region.

Regional recovery conditioned on the subsidence of war

At the regional level, the International Monetary Fund projected the economies of the Middle East, North Africa, Afghanistan, and Pakistan to recover with a growth of 6.6% in 2027, driven mainly by the restoration of oil and gas production and trade activity in energy-exporting countries directly affected by the war.

It projected the economies of the Gulf Cooperation Council to contract by 4.8% in 2026, before recovering with a growth of 9.1% in 2027, with the restoration of production capacities and the repair of damaged infrastructure.

It projected that Gulf Cooperation Council economies will contract by 4.8% in 2026, before recovering with a growth of 9.1% in 2027, with the restoration of production capacities and the repair of damaged infrastructure.

In contrast, the Fund raised its growth forecasts for emerging market economies and middle-income oil-importing countries in the region to 4.2% in 2026, an increase of 0.3 percentage points from the April forecasts, while it projected the economies of the Caucasus and Central Asia to grow by 5.2% in 2026 and 5% in 2027.

It explained that the regional recovery forecasts are based on the assumption that the severity of the conflict will subside in early 2027, with a gradual return of energy production and trade movement to normal until the end of the year, while risks associated with production disruptions, trade routes, and high borrowing costs persist.