Dr. Hamad Kasasbeh

A recent strand of Jordan’s economic debate has given particular importance to three factors in assessing the economy’s direction and stability: the strength of the economic relationship with the United States and the trade and assistance associated with it, fluctuations in energy prices and their impact on import costs and public finances, and the quality of economic decision-making. There is no dispute over the importance of these factors or the speed with which their effects can reach the Treasury and the wider economy. But this raises a broader question: are the channels that transmit shocks most rapidly necessarily the same factors that determine the economy’s strength and direction?

A distinction is needed between what exposes the economy to pressure and what gives it the capacity to grow. External relations are an important channel for trade and finance, oil prices are a global variable beyond Jordan’s control, and the quality of decisions affects the economy as a whole. Jordan’s external economic relations are also too broad to be reduced to a single partner. Alongside the United States, Jordan has a Strategic and Comprehensive Partnership with the European Union, a growing strategic partnership with China, economic ties with India and other Asian economies, and deep Arab economic links that remain the leading destination for national exports. This diversity is itself a source of strength because it broadens markets, investment and financing sources and gives the economy wider options when any external channel comes under pressure. Yet these relationships, important as they are, do not by themselves explain economic strength. Sustainable strength is built at home through productivity, investment, employment, exports and income, and through the economy’s capacity to generate lasting value added.

This can be tested simply. If energy prices were stable, external inflows continued without major pressure, and the quality of decision-making improved, would Jordan’s main economic challenges disappear? Not necessarily. Unemployment could remain high, productivity limited, investment below what is needed, debt costly and per-capita income growth slow. Reducing pressures gives the economy more room to move, but it does not by itself create growth engines, nor does it guarantee that stability will translate into a tangible improvement in productive and employment capacity.

Current indicators make this clear. Real GDP grew by 2.9 percent in the first quarter of 2026, total exports rose by 14.5 percent during the first half of the year, and the trade deficit narrowed by 5.5 percent, while unemployment among Jordanians remained at 21 percent in the second quarter. These indicators are not contradictory. They show that improvements in growth and trade do not achieve their full effect unless they translate into higher productivity, broader investment, more jobs and better income. Economic strength is therefore not measured by the growth rate alone, but by the quality of that growth and its ability to raise productivity, expand investment and create jobs and income.

The energy shock should therefore be read more deeply than through the import bill alone. The value of imports of crude oil, petroleum products and mineral oils rose by 58.1 percent in the first half of 2026 to about JOD 2.041 billion. The figure reveals the scale of exposure, but it is not enough to measure strength. The more important question is whether the economy becomes less sensitive to such shocks over time. This is where diversifying energy sources, improving efficiency and expanding domestic alternatives become critical; the test is not only the size of the shock, but how far the economy succeeds in reducing its exposure to it.

The same logic applies to public finances. Deficits, debt and debt-servicing costs are indicators that cannot be ignored, but focusing on them alone is insufficient. The strategic question is what borrowing and public spending finance, and what economic return they generate. Borrowing that builds infrastructure and raises productive capacity is different from borrowing that covers recurring commitments. Fiscal sustainability therefore means more than the ability to manage a deficit; it also requires broadening the economic base so that it can generate stronger growth and higher revenues in the future.

Jordan’s programme with the International Monetary Fund belongs in the same context. Completion of the fifth review under the Extended Fund Facility and the second review under the Resilience and Sustainability Facility in June 2026 made about US$188 million available, providing a framework that supports discipline, stability and access to financing. But the IMF programme, however important, is not a growth engine in itself. Its real economic value appears when stability translates into stronger private investment, higher productivity, a more competitive business environment and broader employment opportunities.

The Economic Modernisation Vision therefore offers a broader framework for reading the economy. Its second executive programme for 2026–2029 is built around eight growth engines and 25 sectors, and links implementation to projects, outputs and measurable impact indicators. This reflects an understanding of the economy as an interconnected system of industry, services, investment, entrepreneurship, energy, resources and other sectors. It also places the quality of decision-making in its proper context: its value is not measured by the issuance of a decision itself, but by its ability to turn resources and opportunities into productivity, investment, competitiveness and jobs.

The conclusion is that understanding sources of risk is essential, but it should not become a substitute for understanding sources of strength. This brings the principle of self-reliance, reflected in Royal directives to strengthen production and national economic capacity, back to the centre of the discussion. Self-reliance does not mean isolation from partners or dispensing with external financing and investment. It means raising the economy’s capacity to produce, export and generate income while diversifying markets, energy and financing sources and reducing excessive dependence on any of them. Knowing where the next shock may come from matters, but the more important test is whether we are building an economy in which each subsequent shock has less power to alter its course.