Jordan is currently witnessing a wide and public debate about the level of public debt, following the government’s announcement that its total had reached about 46.7 billion Jordanian dinars by the end of last August 2025, equivalent to nearly 119% of the country’s GDP.
اضافة اعلان
While there are differing views on how to calculate this ratio, some exclude the debts owed to the Social Security Investment Fund, while others include them, the fact that debt has reached this level raises genuine concern, even if other fiscal and monetary indicators appear relatively stable.
The current situation cannot be attributed to the present government alone. The public debt crisis in Jordan is not a recent development; rather, it is the outcome of a long standing approach to public finance management that has relied on borrowing as an easy and quick option to cover deficits, whether through external or domestic sources, and via various financing instruments.
This approach has made debt a permanent tool for financing expenditures, rather than a catalyst for investment and growth. Consequently, it has weakened the economy’s capacity to generate sustainable and self-sufficient revenues.
Total public debt increased from around 29.7 billion dinars in 2019 to over 46 billion dinars by mid-2025, an unprecedented rise that reflects a structural imbalance in the country’s economic growth model. Jordan’s economy continues to suffer from a weak productive base, heavy reliance on remittances and foreign aid, and an unfair tax system that depends on indirect taxes for more than two-thirds of revenues, while income tax remains limited in impact and lacks progressivity.
With economic growth rates remaining below 3% and unemployment above 20%, successive governments have resorted to borrowing to finance public spending and debt servicing itself. This has caused debt-servicing costs to exceed 2 billion dinars annually, an amount nearly equal to the total spending on education and health combined.
Although some fiscal indicators, such as a stable exchange rate and adequate foreign reserves, are relatively reassuring, the risks associated with the continued rise of public debt, both in absolute value and as a share of GDP, should not be underestimated. Each additional increase represents further pressure on public revenues and a reduced ability for the government to invest in essential services and infrastructure.
Addressing this crisis requires a fundamental shift in public debt and fiscal management policies, regardless of economists’ differing opinions, whether within or outside government, on the risks of public debt. This transformation must begin with a fair tax reform that reduces dependence on consumption taxes and strengthens the progressivity of income tax. It should also involve curbing unnecessary current expenditures and directing resources toward productive investments that create real jobs.
Moreover, a comprehensive review of the borrowing strategy is essential to ensure that public debt is not treated as an automatic choice but rather as a deliberate tool to support economic and social development.
Jordan urgently needs a new approach to public economic management, one that rationalizes borrowing, improves spending efficiency, and strengthens domestic production. The continued accumulation of debt, even amid stable financial indicators, poses a serious risk to economic sustainability and the well-being of future generations.
