Dr. Hamad Kasasbeh

Jordan’s economic challenge does not lie in the absence of stability, but in the limited ability to turn this stability into productive growth that creates more jobs and raises income. This reading is based on the main findings of my new book, which will be published soon. The book discusses Jordan’s potential economy and how growth can be rebuilt on the basis of productivity and better use of available resources.

Despite regional shocks, economic pressures, and limited resources, Jordan has managed to maintain an important degree of financial and monetary stability. This is an achievement that should not be underestimated. However, the next stage requires more than preserving economic balances. Stability should become a foundation for an economy that is more productive, more competitive, and more capable of creating jobs.

The issue is not only the size of growth, but also its quality. Growth that depends on wider economic activity without clear improvement in productivity remains limited in its impact on unemployment and income. Productive growth, by contrast, is growth that makes labor more efficient, investment more rewarding, and finance more connected to sectors that can create real added value.

This is where the idea of the “potential economy” becomes important. It means that Jordan has economic capacities that are not yet fully used. Labor can become more productive. Investment can generate stronger impact. Finance can move more toward industry, exports, and technology. Some sectors can create higher added value if they receive the right environment and support. Therefore, the challenge is not only to bring in new resources, but also to use existing resources better.

According to a simplified quantitative model for the period 2025–2032, improving labor productivity, investment efficiency, financing toward productive sectors, and export performance could move the Jordanian economy to a stronger path. Under this scenario, real growth could approach 5 percent by 2032. Real output could rise from about JD 42.2 billion to around JD 58 billion, while potential output could reach about JD 74.5 billion. This means that the economy would not only increase its current production, but also raise its future productive capacity.

The importance of this transformation is clear in the labor market. If growth becomes more connected to productive sectors, the number of employed workers could rise from about 1.75 million to around 2.23 million, which means nearly half a million additional jobs. Unemployment could also decline from 22 percent to around 12.5 percent. These results cannot be achieved through temporary employment programs. They require an economy that can create real and stable jobs.

The impact does not stop at the number of jobs. When productivity rises, workers can produce higher value, which opens the door to better wages and income. Under the same scenario, average per capita income could rise from about JD 3,800 a year to around JD 5,200 by 2032. In this sense, growth becomes closer to people’s daily lives, not just a number in an economic report.

From a fiscal perspective, this path can also help reduce pressure on the budget and public debt. As the nominal size of the economy grows, revenues improve, and spending is controlled without harming productive investment, the budget deficit could decline from 5.2 percent of GDP to about 2.2 percent. The ratio of comprehensive government debt, including Social Security debt, could also fall from 108.3 percent of GDP to around 85.5 percent. With more efficient fiscal reform, the results could be even better.

Reaching this path, however, requires connected policies, not separate measures. Jordan needs to link education with the labor market, direct finance toward productive sectors, encourage industry and exports, and improve the efficiency of public spending while maintaining fiscal stability. It also needs clearer institutional coordination so that economic policies move in one direction: raising productivity, expanding job opportunities, and improving income.

The conclusion is that Jordan does not lack potential. It needs to activate this potential more efficiently. Stability is important, but it is not the end of the road. What is needed today is an economy that produces more, employs more, exports more, and manages its resources better. This is the essence of Jordan’s potential economy: turning unused capacities into real growth, jobs, and better income.