Raad Mahmoud Al-Tal

From the first quarter of 2021 to the second quarter of 2026, the Jordanian economy recorded average growth of around 2.55 per cent over 22 quarters, despite the political instability and wars that have affected the region during this period. However, the growth trend has become more encouraging in recent quarters. In 2025, growth improved from 2.7 per cent in the first quarter to 3 per cent in the fourth quarter. This momentum continued into 2026, with growth reaching 2.9 per cent in the first quarter and 3 per cent in the second quarter. Taken together, these figures suggest that the economy has moved toward a more stable growth path of around 3 per cent.

Average growth over the last three quarters reached approximately 2.97 per cent, compared with 2.55 per cent over the full 22-quarter period. This difference is important because it points to a clear improvement in the pace of growth in recent quarters, although it does not yet mean that Jordan has entered a period of high economic growth. The second-quarter figures are therefore significant. Real GDP grew by 3 per cent in the second quarter of 2026, compared with 2.8 per cent in the same quarter of 2025. The 0.2 percentage-point increase may appear modest, but its significance lies less in its size than in the fact that growth has remained close to 3 per cent for three consecutive quarters.

This performance becomes more significant when viewed against the backdrop of complex regional conditions and the challenges they create for trade, tourism, investment and supply chains. In my view, maintaining positive economic growth under such circumstances reflects a degree of resilience and demonstrates the economy’s ability to sustain activity and absorb external shocks.

But which sectors are driving this growth? The most important development is the strong performance of the productive sectors, particularly manufacturing. Manufacturing grew by 6.2 per cent in the second quarter of 2026, more than twice the overall growth rate of the economy. More importantly, it was the largest contributor to overall growth, adding 1.04 percentage points to the 3 per cent growth rate. Manufacturing also accounted for 17.2 per cent of real GDP, the largest share among all economic sectors.

These figures make manufacturing a central pillar in understanding the current growth performance. There is an important economic distinction between growth in economic activity in general and growth driven by a productive sector capable of generating real value added and expanding into domestic and international markets. Manufacturing is also closely connected to the rest of the economy. An expansion in industrial production creates greater demand for transportation, energy, storage, finance, insurance, trade and logistics. Its economic impact therefore extends well beyond its direct contribution to GDP.

The broader growth figures also point to an improvement across several productive activities. Agriculture grew by 7.8 per cent, electricity by 5 per cent, and water by 4.1 per cent. Positive growth was also recorded in transportation and storage, information and communications and financial activities. This indicates that growth in the second quarter was not dependent on a single activity. Nevertheless, manufacturing remained the most significant contributor to overall economic growth.

The importance of this performance becomes even clearer when we look at foreign trade. During the first seven months of 2026, total exports increased by 10.3 per cent, while national exports increased by 4.6 per cent. At the same time, the trade deficit declined by 6 per cent, and the export coverage ratio of imports improved from 51 per cent to 55 per cent. These developments send several important signals. First, the economy’s export capacity is improving. Second, exports are covering a larger share of imports. Third, the relationship between industrial performance and external trade deserves greater attention, particularly given the important role of productive and industrial activities in Jordan’s export base.

Has the improvement in economic growth begun to translate into the labour market? This is an important question. If economic growth provides the broad picture of the economy, the labor market is one of the most important tests of whether that growth is reaching citizens. The unemployment rate among Jordanians declined from 21.3 per cent in the second quarter of 2025 to 21 per cent in the second quarter of 2026. The unemployment rate for the total population also declined from 16.5 per cent to 16.1 per cent.

This improvement does not mean that the unemployment problem has been solved. An unemployment rate of 21 per cent among Jordanians remains high, and the modest decline cannot be described as a fundamental transformation in the labor market. At the same time, however, it is an important positive signal, particularly if it forms part of a broader trend in which stronger economic growth is accompanied by gradual improvements in labor-market conditions. This brings us to the question that matters to citizens more than any other economic figure: How does 3 per cent economic growth translate into people’s lives?

The economic answer is that the impact of growth is neither immediate nor automatic. When we say that real GDP grew by 3 per cent, we mean that the economy produced more goods and services than it did during the same period of the previous year. Higher production creates incentives for investment, while investment expands productive capacity. As businesses expand production, demand for labour, inputs and related services increases. Over time, this can create more employment opportunities, raise incomes, and improve living standards. The impact of economic growth therefore takes time to move from higher economic activity to tangible improvements in people’s lives.

This is why the continuity and quality of growth matter. Growth in a single quarter is not enough to generate a significant change in living standards. Sustained growth, however, allows output and productive capacity to accumulate over time. The economy’s ability to generate employment and income becomes greater when growth is driven by sectors with high value added and strong potential for investment, exports, expansion, and productivity gains.

The economy is the outcome of a wide range of interacting factors, including economic policy, investment, domestic and external demand, remittances, energy prices, foreign trade, and regional and international conditions. The challenge in the next phase, therefore, is not simply to maintain growth at around 3 per cent, but to gradually raise the growth rate and turn the current stability into higher and more sustainable growth. This requires greater industrial investment, easier access to finance, lower production costs, new export markets, stronger domestic value chains, and better alignment between education and training and the needs of productive sectors.

People may not feel the impact of one quarter of 3 per cent growth immediately. But the impact of sustained, accelerating, and cumulative growth becomes increasingly visible over time, particularly when that growth is led by a productive sector capable of generating real value added. This is the true value of economic growth: turning the figures in national accounts into tangible improvements in people’s lives.