Raad Mahmoud Al-Tal

When the Department of Statistics announced that the national economy grew by 2.9 per cent in the first quarter of 2026, compared with 2.7 per cent during the same period in 2025, the initial impression might be that the improvement is merely two-tenths of a percentage point. However, a deeper economic analysis reveals that the significance of these results lies not in the figure itself, but in the quality and sources of growth. That message may be even more important than the growth rate itself.

For the first time in quite some time, the country’s productive sectors are clearly leading the growth story. Agriculture expanded by 6.8 per cent, manufacturing by 5.3 per cent, mining and quarrying by 4.7 per cent, and electricity by 4.3 per cent. These are not simply sectors posting higher growth rates; they generate real value added, strengthen exports, improve productivity and enhance the economy’s resilience against external shocks.

An important economic insight emerges from these figures: the fastest-growing sector is not necessarily the one with the greatest impact on the economy. Although agriculture recorded the highest growth rate, manufacturing made the largest contribution to overall economic growth, adding 0.86 percentage points out of the total 2.9 per cent growth. This represents nearly one-third of total economic growth, reflecting manufacturing’s substantial weight in the economy, where it accounts for 16.6 per cent of Jordan’s GDP. This finding highlights a fundamental economic principle: a sector’s size within the economy is just as important as its growth rate.

These figures also send an important message to policymakers. Investment in productive sectors generates strong multiplier effects throughout the economy. Growth in manufacturing stimulates not only industrial output but also transportation, logistics, trade, employment, exports and, ultimately, government revenues. This is the essence of the economic multiplier effect.

Furthermore, the data show that all economic sectors recorded positive growth during the first quarter. This is a healthy sign of a more balanced economic expansion rather than growth driven by a single sector. Such diversification enhances the economy’s resilience and reduces its vulnerability to regional and global uncertainties.

Nevertheless, Jordan continues to face a major challenge: transforming economic growth into inclusive growth that is felt by citizens. A growth rate of 2.9 per cent remains below the level required to generate sufficient employment opportunities and absorb new entrants into the labour market. Sustaining this upward trajectory therefore requires policies that encourage private investment, raise productivity, enhance export competitiveness and promote industrial innovation.

From another perspective, the data reveal the continued prominence of certain non-productive sectors. Real estate activities, for example, account for 13.1 per cent of GDP but contributed only 0.11 percentage points to overall growth. This underscores the need to redirect investment towards sectors with higher value added and stronger employment-generating capacity.

What occurred during the first quarter of 2026 is therefore more than a modest increase in the growth rate. It may represent the early stages of a structural transformation in the Jordanian economy towards a model driven more by production, manufacturing and agriculture, rather than excessive reliance on consumption and service-based activities. If this momentum is sustained through sound economic reforms and strategic investments, Jordan could gradually move from economic recovery towards sustainable long-term growth.

Economies should not be judged solely by the strength of their numbers, but by the quality of the growth they achieve and their ability to transform every percentage point of growth into new jobs, productive investment, higher incomes and a more resilient economy. That is the real challenge that should define Jordan’s economic agenda in the years ahead.