European Bank: Jordan has implemented several measures to rationalize energy consumption and support agriculture and tourism.
European Bank: Jordan is among the economies most affected by the repercussions of the war in the Middle East.
اضافة اعلان
EBRD: Jordan's economic growth is projected to reach 2.8% in 2027.
European Bank: Commends the launch of the Aqaba–Tartous corridor to facilitate trade.
The European Bank for Reconstruction and Development (EBRD) stated that Jordan has taken a series of measures to address the repercussions of rising energy prices resulting from the war in the Middle East. These measures included cutting down on travel for officials, delegations, and government committees, rationalizing energy consumption, alongside support mechanisms targeting the agricultural and tourism sectors.
In its Regional Economic Prospects report for June, a copy of which was obtained by Al-Mamlaka, the Bank projected that economic growth in Jordan will reach 2.8% next year (2027), with expectations of improved economic activity should regional tensions subside. This follows a 2.8% growth rate in 2025 and an expected slowdown to 2.6% in the current year.
The report noted that Jordan's economic growth rose from 2.5% in 2024 to 2.8% in 2025, driven by the recovery of the tourism sector and export performance, despite ongoing uncertainty surrounding global trade policies.
Furthermore, the report praised the launch of the Aqaba–Tartous corridor aimed at facilitating trade between the Red Sea and the Mediterranean, in addition to exempting increased shipping costs from customs duties and accelerating clearance procedures for basic commodities to mitigate supply chain disruptions.
The Bank explained that Jordan is among the economies most vulnerable to the fallout of the war in the Middle East, pointing out that a decline in tourism bookings and the rising cost of food and energy imports have placed additional pressures on the economy.
The report indicated that inflation rose slightly to 1.9% by the end of March 2026 due to the sharp increase in global oil prices. It added that despite the Kingdom experiencing temporary disruptions in natural gas supplies following the outbreak of the conflict in the Middle East, the swift restoration of supplies and the availability of fuel reserves helped prevent significant disruptions to economic activity.
According to the report, the budget deficit reached 5.2% of GDP in 2025, while the total public government debt—including government-guaranteed social security debt—reached 108% of GDP by the end of the same year.
The current account deficit also widened to 5.6% of GDP during 2025 as a result of higher imports, while gross foreign exchange reserves cover more than seven months of imports, according to the report.
The Bank warned that Jordan's high reliance on imports remains a key vulnerability amidst a high-inflation global environment, noting that a prolonged regional conflict could negatively impact tourism and investment, and exacerbate external imbalances.
Regional and International Outlook
Internationally, the report projected that economic growth in the Southern and Eastern Mediterranean (SEMED) region will slow down to 2.5% in 2026 compared to 3.1% in 2025, before rising to 4.2% in 2027. Economic conditions were stronger at the beginning of 2026, with accelerating growth in Egypt and Morocco, a continuing recovery in Lebanon, and ongoing economic expansion in Jordan and Tunisia.
In contrast, the Iraqi economy contracted due to a decline in oil production, leading to a drop in exports and government revenues. Meanwhile, tourism and remittances continued to provide foreign currency to the region, helping to cushion the pressures arising from the high cost of imports.
Since then, the escalation of the conflict in the Middle East has intensified economic pressures by disrupting trade routes, raising energy prices, and fueling inflation rates. The largest revisions to growth forecasts compared to the February 2026 version of the report were recorded in Lebanon and Iraq, as they are the most directly exposed to the fallout of the conflict.
Uncertainty remains high. A prolonged conflict could keep oil and gas prices at elevated levels, weaken investment and tourism, disrupt supply chains, and increase borrowing costs, particularly in highly indebted countries with significant financing needs.
According to the report, governments have taken measures to curb energy demand and protect households and businesses from rising fuel prices. Both Egypt and Jordan have implemented several steps in this context, including imposing travel restrictions on the public sector and rationalizing energy consumption.
The impacts of regional tensions are expected to vary among the region's economies. Countries with stronger reserves and fiscal capacities appear more capable of withstanding external shocks, whereas countries more exposed to the conflict’s fallout and financing pressures face higher risks. Additionally, prolonged instability could weaken investment, tourism, and trade, while driving up borrowing costs.
Source: Al-Mamlaka
