Growth Pathways in Jordan: How to Improve Performance Without Increasing Public Spending
Jordan’s economy has a tangible opportunity to strengthen its growth trajectory without adding pressure on public finances. The central question, therefore, is whether the economy can move closer to the growth level international institutions consider necessary to absorb new entrants into the labor market—estimated at around 4%. This question becomes more relevant when examining the historical performance of growth: Jordan achieved an average of nearly 6% between 2000 and 2009, driven by strong investment flows and robust regional demand, while the period 2010–2025 witnessed a decline to roughly 2%–2.5% due to weaker investment, higher production costs, and intensified regional pressures (World Bank, 2023; IMF, 2024).
Despite the impact of regional tensions, rising public debt, and fiscal pressures, these conditions are no longer temporary circumstances that can be used to justify weak growth. Instead, they have become structural elements of the economic environment that must be managed rather than avoided. Therefore, enhancing growth requires focusing on efficiency, productivity, and regulatory quality, as these represent the most realistic and impactful pathways given the limited ability to influence external conditions. Global experience shows that low-cost reforms—when implemented rigorously—can generate noticeable growth even in challenging fiscal and regional environments.
Within this context, improving the regulatory environment becomes the first and most important entry point for accelerating growth. Simplifying procedures, unifying licensing pathways, and increasing regulatory transparency are all critical for investment decisions.
Reducing transaction time and lowering bureaucratic compliance costs also enable firms to redirect time and resources from administrative burdens to production—making this one of the fastest tools for stimulating growth without additional public spending.
Raising sectoral productivity represents another efficient pathway for accelerating growth at minimal cost. Existing productivity gaps within Jordan’s business environment can be addressed through improved management, enhanced worker skills, and modernized operational processes. According to the International Labour Organization, productivity increases of 10%–15% can generate meaningful improvements in output without any additional fiscal commitment (ILO Productivity Report, 2025).
Growth potential also expands through enhanced export competitiveness, particularly in sectors where Jordan holds latent advantages such as technology, medical services, education, and specialized tourism. Improving border efficiency, reducing trade compliance costs, and enhancing access to regional markets can increase growth by up to one percentage point, according to World Bank estimates (World Bank – Trade Facilitation, 2024).
Labor market reform remains an essential component of the growth equation. Increasing women’s labor force participation by 5%, improving technical skills, and facilitating labor mobility across sectors can add between 1% and 1.5% to GDP without imposing any fiscal burden. This aligns with IMF findings that human capital enhancement is one of the most effective tools for growth (IMF – Gender & Growth, 2024).
Jordan also has meaningful opportunities to improve growth through more efficient use of under-utilized public assets, including industrial zones, logistics hubs, and state-owned land. Activating these assets through innovative operating models and investment partnerships reduces the need for capital-intensive public expenditure while transforming idle assets into engines of economic activity—supporting the broader goal of improving government asset management.
Economic confidence remains a decisive factor shaping private-sector investment. Stable legislation, clear regulations, and a coherent institutional environment reduce uncertainty and support expansionary business decisions. OECD estimates indicate that improving regulatory confidence can raise private investment by up to 15% without requiring any direct financial incentives (OECD – Business Confidence, 2024).
Accordingly, achieving growth close to 4% does not result from a single indicator or sector. Instead, it requires an integrated reform agenda encompassing regulatory improvements, productivity gains, export competitiveness, efficient asset utilization, and strengthened business confidence. The government’s role becomes central in prioritizing these pathways, linking them to clear implementation timelines, and translating them into measurable actions. When these priorities are embedded within a cohesive economic policy framework and supported by effective coordination across state institutions, reaching the targeted growth level becomes realistic and aligned with international assessments—paving the way for a more balanced economy capable of generating jobs without increasing the fiscal burden.
Jordan’s economy has a tangible opportunity to strengthen its growth trajectory without adding pressure on public finances. The central question, therefore, is whether the economy can move closer to the growth level international institutions consider necessary to absorb new entrants into the labor market—estimated at around 4%. This question becomes more relevant when examining the historical performance of growth: Jordan achieved an average of nearly 6% between 2000 and 2009, driven by strong investment flows and robust regional demand, while the period 2010–2025 witnessed a decline to roughly 2%–2.5% due to weaker investment, higher production costs, and intensified regional pressures (World Bank, 2023; IMF, 2024).
Despite the impact of regional tensions, rising public debt, and fiscal pressures, these conditions are no longer temporary circumstances that can be used to justify weak growth. Instead, they have become structural elements of the economic environment that must be managed rather than avoided. Therefore, enhancing growth requires focusing on efficiency, productivity, and regulatory quality, as these represent the most realistic and impactful pathways given the limited ability to influence external conditions. Global experience shows that low-cost reforms—when implemented rigorously—can generate noticeable growth even in challenging fiscal and regional environments.
Within this context, improving the regulatory environment becomes the first and most important entry point for accelerating growth. Simplifying procedures, unifying licensing pathways, and increasing regulatory transparency are all critical for investment decisions.
Reducing transaction time and lowering bureaucratic compliance costs also enable firms to redirect time and resources from administrative burdens to production—making this one of the fastest tools for stimulating growth without additional public spending.
Raising sectoral productivity represents another efficient pathway for accelerating growth at minimal cost. Existing productivity gaps within Jordan’s business environment can be addressed through improved management, enhanced worker skills, and modernized operational processes. According to the International Labour Organization, productivity increases of 10%–15% can generate meaningful improvements in output without any additional fiscal commitment (ILO Productivity Report, 2025).
Growth potential also expands through enhanced export competitiveness, particularly in sectors where Jordan holds latent advantages such as technology, medical services, education, and specialized tourism. Improving border efficiency, reducing trade compliance costs, and enhancing access to regional markets can increase growth by up to one percentage point, according to World Bank estimates (World Bank – Trade Facilitation, 2024).
Labor market reform remains an essential component of the growth equation. Increasing women’s labor force participation by 5%, improving technical skills, and facilitating labor mobility across sectors can add between 1% and 1.5% to GDP without imposing any fiscal burden. This aligns with IMF findings that human capital enhancement is one of the most effective tools for growth (IMF – Gender & Growth, 2024).
Jordan also has meaningful opportunities to improve growth through more efficient use of under-utilized public assets, including industrial zones, logistics hubs, and state-owned land. Activating these assets through innovative operating models and investment partnerships reduces the need for capital-intensive public expenditure while transforming idle assets into engines of economic activity—supporting the broader goal of improving government asset management.
Economic confidence remains a decisive factor shaping private-sector investment. Stable legislation, clear regulations, and a coherent institutional environment reduce uncertainty and support expansionary business decisions. OECD estimates indicate that improving regulatory confidence can raise private investment by up to 15% without requiring any direct financial incentives (OECD – Business Confidence, 2024).
Accordingly, achieving growth close to 4% does not result from a single indicator or sector. Instead, it requires an integrated reform agenda encompassing regulatory improvements, productivity gains, export competitiveness, efficient asset utilization, and strengthened business confidence. The government’s role becomes central in prioritizing these pathways, linking them to clear implementation timelines, and translating them into measurable actions. When these priorities are embedded within a cohesive economic policy framework and supported by effective coordination across state institutions, reaching the targeted growth level becomes realistic and aligned with international assessments—paving the way for a more balanced economy capable of generating jobs without increasing the fiscal burden.
Jordan’s economy has a tangible opportunity to strengthen its growth trajectory without adding pressure on public finances. The central question, therefore, is whether the economy can move closer to the growth level international institutions consider necessary to absorb new entrants into the labor market—estimated at around 4%. This question becomes more relevant when examining the historical performance of growth: Jordan achieved an average of nearly 6% between 2000 and 2009, driven by strong investment flows and robust regional demand, while the period 2010–2025 witnessed a decline to roughly 2%–2.5% due to weaker investment, higher production costs, and intensified regional pressures (World Bank, 2023; IMF, 2024).
Despite the impact of regional tensions, rising public debt, and fiscal pressures, these conditions are no longer temporary circumstances that can be used to justify weak growth. Instead, they have become structural elements of the economic environment that must be managed rather than avoided. Therefore, enhancing growth requires focusing on efficiency, productivity, and regulatory quality, as these represent the most realistic and impactful pathways given the limited ability to influence external conditions. Global experience shows that low-cost reforms—when implemented rigorously—can generate noticeable growth even in challenging fiscal and regional environments.
Within this context, improving the regulatory environment becomes the first and most important entry point for accelerating growth. Simplifying procedures, unifying licensing pathways, and increasing regulatory transparency are all critical for investment decisions.
Reducing transaction time and lowering bureaucratic compliance costs also enable firms to redirect time and resources from administrative burdens to production—making this one of the fastest tools for stimulating growth without additional public spending.
Raising sectoral productivity represents another efficient pathway for accelerating growth at minimal cost. Existing productivity gaps within Jordan’s business environment can be addressed through improved management, enhanced worker skills, and modernized operational processes. According to the International Labour Organization, productivity increases of 10%–15% can generate meaningful improvements in output without any additional fiscal commitment (ILO Productivity Report, 2025).
Growth potential also expands through enhanced export competitiveness, particularly in sectors where Jordan holds latent advantages such as technology, medical services, education, and specialized tourism. Improving border efficiency, reducing trade compliance costs, and enhancing access to regional markets can increase growth by up to one percentage point, according to World Bank estimates (World Bank – Trade Facilitation, 2024).
Labor market reform remains an essential component of the growth equation. Increasing women’s labor force participation by 5%, improving technical skills, and facilitating labor mobility across sectors can add between 1% and 1.5% to GDP without imposing any fiscal burden. This aligns with IMF findings that human capital enhancement is one of the most effective tools for growth (IMF – Gender & Growth, 2024).
Jordan also has meaningful opportunities to improve growth through more efficient use of under-utilized public assets, including industrial zones, logistics hubs, and state-owned land. Activating these assets through innovative operating models and investment partnerships reduces the need for capital-intensive public expenditure while transforming idle assets into engines of economic activity—supporting the broader goal of improving government asset management.
Economic confidence remains a decisive factor shaping private-sector investment. Stable legislation, clear regulations, and a coherent institutional environment reduce uncertainty and support expansionary business decisions. OECD estimates indicate that improving regulatory confidence can raise private investment by up to 15% without requiring any direct financial incentives (OECD – Business Confidence, 2024).
Accordingly, achieving growth close to 4% does not result from a single indicator or sector. Instead, it requires an integrated reform agenda encompassing regulatory improvements, productivity gains, export competitiveness, efficient asset utilization, and strengthened business confidence. The government’s role becomes central in prioritizing these pathways, linking them to clear implementation timelines, and translating them into measurable actions. When these priorities are embedded within a cohesive economic policy framework and supported by effective coordination across state institutions, reaching the targeted growth level becomes realistic and aligned with international assessments—paving the way for a more balanced economy capable of generating jobs without increasing the fiscal burden.
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Growth Pathways in Jordan: How to Improve Performance Without Increasing Public Spending
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