Fitch forecasts Jordan’s GDP growth to accelerate to 2.8% by next year.
The reopening of Syrian markets is expected to boost Jordanian exports and spur fixed investment.
اضافة اعلان
A recent international economic report showed that Jordan’s economy outperformed expectations in the first quarter of 2025, prompting risk assessment agencies to raise their annual GDP growth forecast from 1.6% to 2.0% for this year.
According to a report by Fitch Ratings, data from Jordan’s Department of Statistics revealed an annual growth rate of 2.7% in Q1 2025, with a seasonally adjusted quarterly growth of 0.7%, consistent with the economic trend since early 2024.
The industrial sector, which makes up approximately 17.7% of the GDP, was a key driver of growth, recording a 5.1% expansion—the highest since Q1 2008, the report stated.
Data also showed that most economic sectors in Jordan saw notable growth in Q1 2025, despite regional challenges, aligning with the goals of the Economic Modernization Vision, which aims for gradual increases in growth rates.
Sectoral Performance in Q1 2025:
Agriculture: highest growth at 8.1%, contributing 0.45 percentage points to overall GDP growth.
Electricity & Water: grew by 5.8%, contributing 0.08 points.
Manufacturing: expanded by 5.1%, contributing 0.88 points.
Social & Personal Services: rose by 3.4%, adding 0.27 points to growth.
Impact of U.S. Tariffs
Despite the positive growth revision, the report warned of a potential slowdown in economic activity starting in Q2 2025, due to expected fallout from U.S. protectionist trade policies. Following an announcement by President Donald Trump to impose reciprocal tariffs on goods beginning August 1, tariffs on Jordanian exports to the U.S. are anticipated to rise to 10–20%. This could negatively impact Jordan’s trade balance, especially given the importance of the U.S. as an export market.
Inflation and Monetary Policy
The report projects average inflation for 2025 at just 1.6%, largely due to falling global energy prices.
It also expects the Central Bank of Jordan to begin easing monetary policy in line with the U.S. Federal Reserve, cutting interest rates by 50 basis points, bringing them down to 6.00% by year-end.
Positive Outlook for 2026
Looking ahead to 2026, Fitch anticipates GDP growth will accelerate to 2.8%, as the impact of U.S. tariffs wanes and consumer spending improves. The reopening of neighboring markets—particularly Syria and Iraq—is also expected to bolster exports and attract foreign direct investment, especially in industrial infrastructure.
Unemployment is forecast to decline slightly to 22.3% by the end of 2026, while lower oil prices will further support household purchasing power.
Risks Remain
However, the report concludes by cautioning that downside risks remain. Rising regional tensions or more aggressive U.S. trade policies could lead to higher energy prices or reduced demand for exports—factors that may weaken Jordan’s future economic outlook.
