Ammon News : Each time figures on public debt or economic growth are released, public debate tends to treat them as the ultimate measure of economic health. Yet numbers alone, no matter how accurate, do not fully reveal the direction of the economic path. Many imbalances do not originate in official reports. Instead, they gradually take shape outside the visible indicators before eventually appearing as fiscal pressure or slower activity, often at a higher cost than if they had been addressed early.

From this perspective, economic weakness is rarely tied to a single indicator. Rather, it accumulates through parallel and interacting paths. Three main dimensions can be identified: long-term financial commitments that are not recorded as direct debt, economic decisions whose resolution is repeatedly delayed, and silent structural risks that gradually expand within the economy. Each dimension may appear limited on its own, but together they weaken adaptability and narrow the room for policy maneuver.

The first dimension concerns long-term, off-balance-sheet commitments. These are real obligations that do not appear as direct public debt, including pension and social security liabilities, government guarantees to public institutions, and long-term commitments in key sectors such as water and energy. While they do not create immediate budgetary pressure, they constrain future resources and reduce fiscal flexibility over time.

In this broader fiscal context, the officially reported public debt — currently approaching 47 billion Jordanian dinars, including obligations to the Social Security Investment Fund — reflects existing liabilities only. It does not include long-term commitments that may later translate into direct fiscal pressures. Therefore, relying solely on current indicators may create a sense of relative stability, while underlying risks continue to build.

The second dimension lies in delayed economic decisions. In several policy areas, the diagnosis is clear, yet implementation is postponed. This is evident in labor market reform, linking wages to productivity, and restructuring certain public institutions. As a result, slow resolution generates uncertainty, influences investment decisions, weakens confidence, and limits job creation.

At the same time, the third dimension consists of structural risks that gradually penetrate the economic base. Among the most significant are long-term unemployment, disguised unemployment, and the expansion of the informal sector. These trends do not trigger sudden crises, but they weaken labor market efficiency, shrink the tax base, and directly undermine productivity and the economy’s ability to sustain growth.

In light of the above, addressing these three dimensions in an integrated manner can generate a meaningful shift in the economic trajectory. The experience of advanced economies shows that transparently incorporating future liabilities, accelerating reforms, and tackling labor market distortions at an early stage have been decisive factors in strengthening sustainability and raising long-term growth. Proactive management reduces the cost of adjustment and prevents the accumulation of deferred pressures.

Accordingly, adopting such an approach in Jordan would raise productivity, strengthen confidence, and reduce future adjustment costs, as emphasized in international economic assessments (IMF, 2024; World Bank, 2024). Over the medium term, this could increase the annual growth rate by roughly one to two percentage points, moving it from the 2–3 percent range toward levels closer to 4 percent in a more stable and sustainable manner. Ultimately, the core challenge does not lie in the level of debt or the growth rate alone, but in how these underlying paths are managed before they become permanent constraints on the economy in the years ahead.

Ammon News : Each time figures on public debt or economic growth are released, public debate tends to treat them as the ultimate measure of economic health. Yet numbers alone, no matter how accurate, do not fully reveal the direction of the economic path. Many imbalances do not originate in official reports. Instead, they gradually take shape outside the visible indicators before eventually appearing as fiscal pressure or slower activity, often at a higher cost than if they had been addressed early.

From this perspective, economic weakness is rarely tied to a single indicator. Rather, it accumulates through parallel and interacting paths. Three main dimensions can be identified: long-term financial commitments that are not recorded as direct debt, economic decisions whose resolution is repeatedly delayed, and silent structural risks that gradually expand within the economy. Each dimension may appear limited on its own, but together they weaken adaptability and narrow the room for policy maneuver.

The first dimension concerns long-term, off-balance-sheet commitments. These are real obligations that do not appear as direct public debt, including pension and social security liabilities, government guarantees to public institutions, and long-term commitments in key sectors such as water and energy. While they do not create immediate budgetary pressure, they constrain future resources and reduce fiscal flexibility over time.

In this broader fiscal context, the officially reported public debt — currently approaching 47 billion Jordanian dinars, including obligations to the Social Security Investment Fund — reflects existing liabilities only. It does not include long-term commitments that may later translate into direct fiscal pressures. Therefore, relying solely on current indicators may create a sense of relative stability, while underlying risks continue to build.

The second dimension lies in delayed economic decisions. In several policy areas, the diagnosis is clear, yet implementation is postponed. This is evident in labor market reform, linking wages to productivity, and restructuring certain public institutions. As a result, slow resolution generates uncertainty, influences investment decisions, weakens confidence, and limits job creation.

At the same time, the third dimension consists of structural risks that gradually penetrate the economic base. Among the most significant are long-term unemployment, disguised unemployment, and the expansion of the informal sector. These trends do not trigger sudden crises, but they weaken labor market efficiency, shrink the tax base, and directly undermine productivity and the economy’s ability to sustain growth.

In light of the above, addressing these three dimensions in an integrated manner can generate a meaningful shift in the economic trajectory. The experience of advanced economies shows that transparently incorporating future liabilities, accelerating reforms, and tackling labor market distortions at an early stage have been decisive factors in strengthening sustainability and raising long-term growth. Proactive management reduces the cost of adjustment and prevents the accumulation of deferred pressures.

Accordingly, adopting such an approach in Jordan would raise productivity, strengthen confidence, and reduce future adjustment costs, as emphasized in international economic assessments (IMF, 2024; World Bank, 2024). Over the medium term, this could increase the annual growth rate by roughly one to two percentage points, moving it from the 2–3 percent range toward levels closer to 4 percent in a more stable and sustainable manner. Ultimately, the core challenge does not lie in the level of debt or the growth rate alone, but in how these underlying paths are managed before they become permanent constraints on the economy in the years ahead.

https://en.ammonnews.net/article/89124