Maintaining Jordan's economic growth forecasts reflects its ability to withstand external shocks

The IMF indicated that the continuation of economic reforms and efforts to achieve macroeconomic stability, along with increased infrastructure spending, will support the Jordanian economy's growth prospects in the medium term, noting that economic activity in the Kingdom has shown resilience in the face of the repercussions of the war in the Middle East.

In its Regional Economic Outlook report for the Middle East and Central Asia, released on Thursday, the Fund maintained its growth forecasts for the Jordanian economy at 2.7% in 2026, accelerating to 3.1% in 2027, unchanged from its forecasts issued last April. It also raised its estimate for Jordan's economic growth during 2025 to 2.8%, compared to a previous estimate of 2.7%.

The stabilization of Jordan's growth forecasts comes at a time when the Fund has lowered its growth forecasts for the economies of the Middle East, North Africa, Afghanistan, and Pakistan by 2.7 percentage points, from an expected growth of 1.4% to a contraction of 1.3% during 2026, due to the repercussions of the war and disruptions in energy production and trade.

The report explained that the growth of the Jordanian economy has generally maintained a pace close to the levels of the second half of 2025, within a group of economies including Egypt, Morocco, Pakistan, and Tunisia, which have shown resilience in the face of the repercussions of the regional conflict.

Financial and economic expert Dr. Mohammed Al-Hadab Al-Sarhan said that the IMF's maintenance of its growth forecasts for the Jordanian economy, despite the decline in its forecasts for regional economies, reflects the Kingdom's ability to withstand external shocks and maintain its productive activity.

He explained that the significance of these forecasts becomes clear when compared to the Fund's projections of a 1.3% contraction in the economies of the Middle East, North Africa, Afghanistan, and Pakistan during the current year, pointing out that continued growth in Jordan amidst these circumstances reflects the robustness of its economic institutions, the effectiveness of government policies and measures taken by the Central Bank to maintain monetary and financial stability, as well as the ability of productive sectors to adapt to regional changes.

Al-Sarhan indicated that the importance of the report is not limited to the stabilization of growth forecasts, but also includes the nature of the economic activity that helped Jordan overcome part of the crisis's repercussions. He pointed out that the improvement in Jordan's trade balance due to the strength of exports, unlike what other oil-importing economies have witnessed, indicates the growing contribution of the national production base in facing external pressures.

He added that the increase in exports is not limited to raising company sales, but also supports foreign currency inflows, improves the ability of factories to continue and expand, and provides additional demand for labor and services related to production, transport, and storage, making the promotion of exports one of the most important tools for protecting economic growth.

Al-Sarhan pointed out that the recovery of tourism activity after its initial impact by regional tensions highlights the importance of diversifying the markets that Jordan relies on, especially with the continued flow of visitors from Arab and Gulf countries. He called for moving from treating tourism as a sector recovering after crises to building a system more capable of maintaining tourism demand under various circumstances, by diversifying target markets, developing tourism products, and improving air connectivity and services.

He added that the stability of tourism revenues and the continuation of export activity help alleviate pressures on the external account and enhance the economy's ability to face fluctuations in energy prices and shipping costs.

Al-Sarhan explained that the IMF's praise for the role of infrastructure projects and economic reforms highlights the importance of investing in major projects, provided they are linked to a clear economic return. Transport, water, and energy projects should not be evaluated only from the perspective of construction spending, but through their ability to reduce production costs, attract investments, and improve the competitiveness of national industries.

He suggested that strategic projects should include indicators that measure the volume of private investments they stimulate, the jobs they provide, and their impact on operating costs and exports, contributing to transforming capital expenditure into a sustainable source of growth, rather than a temporary economic activity during implementation phases.

Al-Sarhan called for investing the positive indicators shown by the report in enhancing the contribution of exportable sectors to growth, by identifying industries that have real opportunities for expansion in regional markets and addressing the challenges they face in the areas of transport, energy, finance, and procedures.

He suggested preparing a joint program between economic entities and the private sector that links the support and facilities provided to projects with measurable results, including increased exports, local value-added, and jobs created, noting that the next phase requires moving from maintaining growth during crises to achieving broader growth that is more reflected in citizens' incomes, in light of the ongoing unemployment challenge.

Al-Sarhan concluded by noting that the IMF's maintenance of its forecasts for Jordan, at a time when regional forecasts have declined, strengthens confidence in the Kingdom's economic path and reflects the importance of the government's and the Central Bank's efforts to maintain stability and continue reforms despite exceptional circumstances.

He stressed that the next challenge lies in transforming this confidence into productive investments, job opportunities, and a tangible improvement in living standards, while continuing to control public finances and protect monetary stability, noting that the strength of the economy is not measured only by its ability to overcome crises, but by its ability to invest stability to build a broader production base, increase exports, and achieve growth that benefits citizens and the private sector.

For his part, economic expert Wajdi Makhamreh said that the IMF's Regional Economic Outlook report for the Middle East and Central Asia reflects the Jordanian economy's ability to remain resilient in the face of the repercussions of the regional war, as the Fund maintained its growth forecasts for the Jordanian economy at 2.7% for 2026 and 3.1% for 2027, and raised its growth estimate for 2025 to 2.8%.

Makhamreh added that the improvement in Jordan's trade balance, driven by the strength of exports, represents a positive indicator of the ability of productive sectors to support growth and enhance foreign currency inflows. He explained that this highlights the importance of continuing to support manufacturing and export sectors, expanding foreign markets, and improving the competitiveness of Jordanian products by reducing production, energy, and transport costs.

He indicated that the Fund points out that increased infrastructure spending, in parallel with economic reforms, will support growth in the medium term, explaining that these investments can improve productivity, attract investments, and provide job opportunities, provided they are directed towards projects with clear economic feasibility, strengthening partnership with the private sector, and ensuring the efficiency of public spending in light of the financial challenges facing the Kingdom.

Makhamreh explained that the recovery of tourism activity after the limited decline at the beginning of the war constitutes a positive development, given the role of tourism in supporting external revenues and stimulating the transport, hotel, restaurant, and trade sectors. However, the sector remains exposed to regional fluctuations, which requires diversifying tourism markets and promoting medical, religious, and cultural tourism.

He added that the positive indicators of the Jordanian economy pose a challenge regarding the extent to which growth is reflected in the lives of citizens, as economic growth does not necessarily lead to reducing unemployment or improving incomes unless it is linked to the expansion of productive investments, the provision of sustainable job opportunities, and an increase in productivity and local value-added.

He stressed that maintaining stability requires maintaining a balance between development spending and controlling the deficit and public debt, and limiting the impact of fluctuations in energy prices and global trade on the Jordanian economy.

In turn, the representative of the clothing and garment sector at the Jordan Chamber of Industry, Engineer Ihab Qadri, said that the IMF's forecasts for Jordanian economic growth of 2.7% during 2026 and its acceleration to 3.1% in 2027 carry economic implications that go beyond the figures themselves, especially since the Fund kept its forecasts for Jordan unchanged, at a time when it sharply lowered regional growth forecasts as a result of the repercussions of conflicts and energy and trade disruptions.

Qadri pointed out that the challenge Jordan has faced over the past years was not limited to maintaining stability, but also included enhancing the real economy's ability to grow despite the complex regional environment. He explained that resilience in the face of crises, while important, does not necessarily mean achieving growth rates sufficient to address unemployment and raise income levels, which makes the next phase linked to transitioning to an economy that possesses stronger drivers for growth, productivity, and investment.

He indicated that the deeper significance of the report lies in linking growth prospects to the continuation of economic reforms and increased investment in infrastructure, which underscores the necessity of treating fiscal reform and structural reform as complementary paths.

He explained that maintaining fiscal and monetary stability enhances confidence and limits risks, but it needs to be coupled with expanding productive investments, deepening industrial value chains, diversifying export markets, raising labor productivity, and developing the tourism, services, and technology sectors, so that stability can transform into higher growth that is more capable of providing job opportunities.

Qadri pointed to the necessity of evaluating infrastructure projects based on their ability to reduce production, transport, and energy costs, stimulate private sector investment, and increase local value-added, rather than solely based on the volume of spending on them.

He concluded by saying that economic achievement is not limited to Jordan maintaining its growth when regional economies decline, but rather lies in investing this resilience to build a faster-growing, more productive economy with broader job opportunities, thereby transforming stability from a defensive advantage in the face of crises into a competitive advantage in attracting investment and stimulating growth.