Overview of Jordan’s Economic Landscape
Overview of Jordan’s Economic Landscape
The Hashemite Kingdom of Jordan is a beacon of stability and an important key player in the Middle East. Its economy has faced ups and downs yet continues to be resilient. An overview of the economic landscape will help assess the situation and guide the future.
Key Sectors
Agriculture
According to recent estimates, agriculture makes up almost 5% of GDP and employs 3% of the labor force. Some primary crops include wheat, barley, lentils, and olives.
Industry
Industry makes up 24% of GDP and employs 18% of the labor force. Some of the most significant activities involve the production of phosphate and potash, which are plentiful in the country.
Services
The services sector is the largest at just under two-thirds of GDP and employs 80% of the labor force. This includes areas like finance and communications and is one of the most important contributors to Jordan’s growth.
Economic Trends
Gross Domestic Product
Jordanian GDP has seen consistent growth, recovering after a slight dip during the pandemic. As of 2023, it stands at $40,584 million (Chart 1). In early 2024, the World Bank noted the resilience and strength of Jordan’s GDP growth, despite regional tensions and crises that may have spillover economic effects and cause uncertainty.
Chart 1 | Jordan Gross Domestic Product
Inflation Rate
The consumer inflation rate peaked at 4.22% in 2022, which showed resilience compared to other countries that saw much higher rates of price increases. It subsequently fell to 2% in 2023 as prices stabilized (Chart 2).
Chart 2 | Jordan Inflation Rate
Labor Market
Unemployment Rate
The unemployment rate is high, at around 22% as of 2023 (Chart 3). Moreover, the youth unemployment rate reached 46% in 2022, exacerbated by the pandemic. One reason is a mismatch between educational attainment and job market requirements. This decreases Jordan’s global labor competitiveness, with a USAID survey showing that 35% of the business sector in Jordan cannot find appropriate talent.
Chart 3 | Jordan Unemployment Rate
Trade Overview
Balance of Payments
Jordan is heavily dependent on exports, which exceed its imports, causing a negative balance of payments. Additionally, remittances from the diaspora are significant due to the number of Jordanians working abroad (Chart 4).
Chart 4 | Jordan Balance of Payments
Exports
The Kingdom’s total exports were around $12 billion in 2023, with the biggest export being chemicals, primarily made up of phosphoric acid and medical and pharmaceutical products. In that same year, the second largest category was manufactured articles, made up of clothing, footwear, printed matter, and plastic products.
Imports
Jordan’s imports were $26 billion in 2023. Primary imports included machinery and transport equipment and food and live animals. It mostly imports from non-Arab Asian countries, with China on top of the list.
Foreign Inflows
International Aid
Jordan receives crucial international aid to support its local population and its generous intake of refugees from neighboring countries. It is also used to fund development projects, such as education, renewable energy, and biodiversity. It receives different types of aid, including direct bilateral grants, European Union grants, and United Nations grants (Chart 5).
Chart 5 | Jordan International Aid
Future Outlook
The Jordanian economy is resilient, despite regional conflict and instability. In collaboration with local enterprises and citizens, comprehensive government planning is necessary to continue growth. Importantly, Jordan should explore ways to reduce the gap between exports and imports, which will help it increase revenue and self-sufficiency. In addition, unemployment must be reduced to increase the utilization of productivity, and international aid must be deployed correctly to benefit the nation.
