Moody's: Jordanian economy withstands regional tensions.. and growth is gradually heading towards 3%

- Moody's raises Jordan's economic strength assessment to ba1 and fiscal strength to b2 within the scorecard

- Moody's: Jordanian institutions enjoy credibility and effectiveness in implementing reforms and facing shocks

- Moody's: Future outlook for Jordan is stable with continued risks of regional tensions

Moody's credit rating agency has concluded its periodic review of the Hashemite Kingdom of Jordan's ratings, expecting the Jordanian economy to continue demonstrating its resilience despite escalating geopolitical tensions in the region, and for the real GDP growth rate to gradually rise to 3% during the remainder of the current decade.

According to a report by the agency reviewed by us, Moody's expects Jordan's real GDP growth to reach 2.7% in 2026, to be gradually strengthened to reach 3% during the remaining years of the decade, driven by progress in implementing major infrastructure projects and improved regional trade flows, including with Syria.

The agency stated that Jordan's credit profile is based on the robustness of its institutions concerned with economic and fiscal policymaking, the strength of international financial and technical support, and access to significant domestic savings, against challenges represented by high debt levels, structural constraints that contribute to keeping growth at relatively modest levels, high unemployment, social pressures, and the volatile regional geopolitical environment.

It added that the Jordanian economy has absorbed the repercussions of the conflict in the Middle East relatively well, benefiting from the diversification of growth sources and the redirection of part of regional trade through the Port of Aqaba.

The agency noted that tourism revenues remained generally stable in nominal terms during the first seven months of 2026, as strong growth in visitor numbers from the region and Gulf countries largely offset the decline in arrivals from Europe and the United States.

Regarding public finance, Moody's expected that the increase in energy costs resulting from the regional conflict would slow the pace of fiscal consolidation and debt reduction, suggesting that the government debt burden would gradually decline from 83.6% of GDP in 2025 to about 81% by the end of 2027.

In its assessment of the components of Jordan's creditworthiness, Moody's set the economic strength score at "ba1", compared to an initial score of "ba2", based on its expectations that economic growth will strengthen to reach about 3%, supported by major infrastructure projects, the gradual implementation of reforms, and improved regional trade integration.

The agency also set the fiscal strength score at "b2", compared to an initial score of "b3", based on the credible peg of the Jordanian Dinar to the US Dollar, which limits the government's balance sheet exposure to negative exchange rate fluctuations.

It explained that these adjustments led to a final result within the scorecard indicating a range between "Ba2" and "B1", compared to the initial range that ranged between "Ba3" and "B2", noting that the assigned rating for Jordan falls within the indicated final result range.

Moody's indicated that the score for the strength of institutions and governance in Jordan, which is "baa1", is based on the robustness of institutions and their track record in maintaining policy credibility and effectiveness, including the proven ability to implement fiscal reforms and proactive policies to deal with shocks.

The agency said that the stable future outlook balances the positive and negative risks facing Jordan's credit profile, expecting that the indirect repercussions of the conflict in the Middle East will remain relatively limited.

It added that the large-scale reform efforts implemented by the government could contribute to accelerating the flow of foreign investments into the Jordanian economy, which could raise future growth to levels exceeding its current expectations, and enhance the Kingdom's ability to face local challenges and external shocks.

Moody's identified a number of factors that could support a rating upgrade in the future, most notably that ongoing reforms lead to improved growth prospects in the medium term, and a reduction in unemployment and social risks, in addition to achieving a tangible decline in the government debt burden and contingent liabilities, particularly in the water and electricity sectors.

It added that a credible and sustainable decline in regional geopolitical risks, which would ease constraints on Jordan's long-term economic development opportunities, could also contribute to a rating upgrade.

Moody's confirmed that its announcement of completing the periodic review does not constitute a new decision regarding the credit rating, nor does it represent an indication of the possibility of taking such a decision in the near future. It stated that the review was based on the rating committee meeting held on October 9, 2026, and that the document summarizes the agency's assessment as of the date of its publication on October 16, 2026.