- The forecast was lowered from 2.6% as regional instability affects energy costs, trade, tourism and investment
- Jordan’s reform agenda must sustain job creation despite a 21.0% unemployment rate among Jordanians and 30.3% among Jordanian women
The European Bank for Reconstruction and Development has lowered its forecast for Jordan’s GDP growth to 2.5% in 2026 from 2.6% in June. The modest revision masks a more important challenge: regional instability, trade interruptions and heightened uncertainty around tourism and investment are adding to the cost of sustaining growth in an economy already managing persistent labour-market and energy vulnerabilities. The EBRD expects growth to strengthen to 2.8% in 2027 if trade bottlenecks ease and energy prices decline.
Jordan’s economy grew by 2.9% year on year in the first quarter of 2026 despite brief disruptions to energy supply and tourism in March. Agriculture, manufacturing and trade remained resilient, offsetting weaker mining, construction and tourism-related services. Inflation rose to 2.8% in May as fuel costs increased, before moderating to 2.7% in July. The Central Bank of Jordan raised its main policy rate by 25 basis points to 6.0% in September, following the US Federal Reserve in order to preserve the dinar’s peg to the dollar. Jordan entered the escalation with meaningful buffers. Its international reserves stood at USD 26.5bn in July, covering more than eight months of imports, while the current-account deficit narrowed in the first quarter as lower imports and stronger remittances offset weaker exports and tourism income. Those indicators support short-term stability, but they do not eliminate the exposure of a resource-importing economy to higher energy costs, disrupted trade routes and a more cautious investor and visitor response.
The regional war that began on 28 February has sharpened these risks. Jordanian authorities said security forces confronted hundreds of drones and missiles targeting the country, while the government moved to protect supply chains, strategic reserves and domestic price stability. The disruption to shipping through the Strait of Hormuz raised global oil, gas and freight costs, increasing the pressure on importers and on the state’s energy bill. The government said in March that the monthly cost of the crisis for the energy and electricity sectors had exceeded JOD 150mn. Aqaba remained operational and was used as a regional transit point, while contingency plans included alternative overland and Mediterranean routes for imports and exports. That has reduced the immediate risk of shortages, but the economic impact is broader than physical availability of goods. Higher logistics and insurance costs, more expensive fuel and weaker regional tourism can weigh on household demand and private-sector margins even when the supply of essential products is maintained.
The growth outlook also needs to be assessed against Jordan’s structural employment challenge. The unemployment rate for Jordanians stood at 21.0% in the second quarter of 2026, with unemployment among Jordanian women at 30.3% and female economic participation at only 14.7%. The Economic Modernisation Vision identifies youth unemployment as a central concern and targets more than one million new income opportunities for Jordanians by 2033. Its current 2026-29 executive programme includes 392 projects across 25 sectors, alongside the wider political and public-sector modernisation tracks. The EBRD’s 2.5% forecast does not undermine the reform agenda, but it underlines the gap between macroeconomic resilience and the faster, more inclusive job creation needed to meet it. The key test will be whether investment in energy security, water, transport, export industries and skills can proceed despite regional volatility. If disruptions diminish, 2027 could bring a firmer recovery; if they persist, protecting fiscal space, private investment and labour-market progress will become increasingly difficult.