Dr. Hamad Kasasbeh

For many years, the question of economic growth in Jordan has been approached primarily through policies and tools: taxation, stimulus measures, investment promotion, or expanding public spending. Yet the limited outcomes of these repeated approaches raise a deeper and more pressing question: is the challenge rooted only in policy choices, or in the growth model within which those policies operate?

Over the past two decades, Jordan’s economy has demonstrated a notable ability to withstand repeated regional and global shocks. Monetary stability has been preserved, inflation has remained relatively manageable compared to neighboring countries, and the banking sector has avoided major crises. However, this success in risk management has not translated into strong or inclusive growth. Average real growth over the past decade has remained around 2–2.5 percent annually—well below the level needed to absorb new labor market entrants or meaningfully raise living standards.

This highlights a central paradox. Stability is essential, but it is not a substitute for growth. The Jordanian economy has relied heavily on domestic demand, public spending, and remittances rather than exports and productivity. Exports of goods and services remain well below half of GDP, compared with ratios exceeding 70 percent in small economies that successfully adopted export-led growth models. As a result, growth remains consumption-driven rather than competitiveness-driven.

The implications of this model are most visible in the labor market. Unemployment has remained persistently high at around 22–23 percent, while youth unemployment exceeds 40 percent. These figures reflect not only a shortage of jobs, but a structural weakness in the economy’s capacity to generate productive and sustainable employment. Regional comparisons show that countries with fewer resources have reduced youth unemployment by aligning education with production chains, rather than expanding public employment or relying on temporary solutions.

This reality suggests that the core problem is not a lack of initiatives, but the absence of structural transformation. The economy remains concentrated in sectors with limited capacity to generate high value added, while scalable sectors—such as export-oriented manufacturing, digital services, and regional value chains—have not received sufficient policy weight. Labor productivity growth has remained weak, automatically constraining the economy’s ability to expand without increasing fiscal pressure.

The growth challenge also cannot be separated from how the economy is managed. Given its geopolitical location, Jordan has long operated in a near-constant state of regional pressure. Over time, crisis management has shifted from an exceptional response to a permanent mode of decision-making. Avoiding the worst outcomes has taken precedence over pursuing the best ones. This is evident in the structure of public spending, where current expenditures dominate, leaving limited space for capital investment that could raise productivity. Persisting in this approach does not safeguard stability in the long run; instead, it gradually turns stability itself into a deferred cost.

Within this context, the Economic Modernization Vision represents an important attempt to move beyond risk containment toward building clear growth engines. The vision identifies sectors that could, in theory, lift growth rates over the coming decade. However, its success depends not only on sound design, but on whether day-to-day fiscal, financial, and regulatory policies are aligned with it—and on the state’s ability to empower the private sector to lead expansion rather than play a secondary role.

If 2026 is being promoted as a year of major projects, the real test will not be the number of announced initiatives, but their capacity to break with the prevailing pattern. This means raising the investment-to-GDP ratio, improving labor productivity, strengthening exports, and integrating projects into real domestic value chains—rather than relying on temporary effects on employment or spending.

In the final analysis, the challenge facing Jordan’s economy is no longer about preserving stability; that capacity has already been proven. The real question is how to convert stability into a platform for genuine growth. Stability protects the present, but redefining the growth model is what secures the future. Delaying this transition does not eliminate its cost—it merely postpones it, to be paid later at a higher economic price.