Raad Mahmoud Al-Tal

Jordan’s industrial exports grew strongly in the first half of 2025. They reached about 4 billion dinars, compared to 3.7 billion dinars in the same period of 2024. This means an increase of 259 million dinars. The result shows that Jordanian industry is resilient and continues to play a central role in driving economic growth.

The manufacturing sector grew by 8 per cent This is important because it shows that Jordanian products are becoming more competitive and are creating more value inside the country. Three sectors led this growth, making up 71 per cent of the increase: leather and clothing (+65 million dinars), food industries (+64 million dinars), and chemicals and cosmetics (+55 million dinars). These sectors are important not only because of their size, but also because they can adapt to global market needs and produce high-value products. Other industries, such as construction materials, pharmaceuticals, and mining, also grew. This wider base makes the economy stronger and less vulnerable to shocks in any single sector.

But why do exports matter so much? The answer lies in the value that stays inside Jordan. Every exported product uses both local and imported inputs. The real benefit for the economy comes from the local inputs — what we call “value added.” For example, when exports rise by 259 million dinars and imports needed for production stay under control, the extra value that remains in Jordan increases. This directly improves the current account by bringing in more foreign currency without raising the import bill as much.

The numbers make this clear. If imported inputs make up 30 per cent of the increase, then about 181 million dinars stay inside Jordan as local value added. But if imported inputs make up 60 per cent, then only about 104 million dinars stay. The difference — 78 million dinars — shows why it is important to use more local materials and reduce reliance on imports. This is something the government should pay close attention to when supporting industrial sectors.

Another positive sign is that exports are reaching new markets. Sales to Syria rose by 85 million dinars, to Ethiopia by 47 million, and to India by 100 million. Djibouti also appeared as a new destination with an increase of 24 million. Diversifying markets in Africa and Asia reduces the risks of relying too heavily on traditional markets and helps keep foreign currency flowing more steadily through the year.

The impact is not only on the current account but also on the government budget. Higher exports mean higher company profits, which raise income tax revenues. More production also increases indirect taxes like sales tax. At the same time, stronger exports and higher foreign currency inflows reduce the need for external borrowing, lower the cost of servicing debt, and help narrow the fiscal deficit.

Still, challenges remain. Rising energy and transport costs, technical requirements in new markets, and global supply chain problems could slow the pace of growth. To deal with this, Jordan needs to improve factory energy efficiency, build stronger logistics systems, promote its products more effectively, and make trade finance easier to

access.The growth of industrial exports in the first half of 2025 is not just a short-term success. It is a chance to turn export growth into a lasting advantage. By increasing local content in every dinar of exports and raising productivity in leading sectors, Jordan can achieve a stronger current account, a budget less dependent on debt, and an industry that is firmly placed in global markets.

Raad Mahmoud Al-Tal is head of the Department of Economics – University of Jordan