Jordan's Economy: Shocks Transformed into Catalysts for Growth

Jordan has consistently demonstrated remarkable economic resilience in the face of ongoing global and regional instability. Rather than succumbing to external pressures, the nation has strategically leveraged these challenges as opportunities for significant reform and economic diversification. This proactive approach, guided by the ambitious Economic Modernization Vision 2023-2033, has enabled Jordan to sustain impressive growth rates, advance critical infrastructure projects, and champion digital transformation and green energy initiatives.

Navigating Global and Regional Economic Turbulence

Despite a landscape marked by high uncertainty, subdued global demand, and disruptions to international trade routes, Jordan's economy has shown robust performance. Real GDP expanded by 2.9% in 2023 and an estimated 2.5% in 2024, with projections pointing to a further 2.7% growth in 2025. These figures underscore Jordan's exceptional capacity to maintain economic momentum even under profoundly challenging conditions.

The nation's strategic response to external shocks has been pivotal. Through rigorous adherence to the Economic Modernization Vision, Jordan has prioritized key development areas including infrastructure upgrades, comprehensive digital transformation across sectors, the expansion of green energy capabilities, and substantial investments in human capital development. Furthermore, Jordan's commitment to fiscal discipline and structural reform is evidenced by the successful completion of 99 structural benchmarks across four International Monetary Fund (IMF) programs, including the current Extended Fund Facility (EFF). This dedication has not only reinforced international confidence but also bolstered macroeconomic stability. A concerted effort towards export diversification, enhanced energy security, and robust international support have collectively fortified Jordan's stability, positioning it for sustainable and inclusive long-term development.

The Central Bank of Jordan's Proactive Stance for Stability

The Central Bank of Jordan (CBJ) has been instrumental in safeguarding the nation's economic resilience. Its strategy revolves around maintaining a robust monetary and financial framework, upholding a credible exchange rate regime, continuously strengthening the banking sector, and driving essential structural reforms.

Fostering Growth Through Targeted Financing

To stimulate economic growth and address unemployment, the CBJ has implemented targeted financing programs offering preferential rates to support vital economic sectors. These initiatives are designed to channel much-needed capital into areas with high growth potential.

Empowering Micro, Small, and Medium-sized Enterprises (MSMEs)

Recognizing the critical role of MSMEs in economic development, the CBJ has forged strategic partnerships with prominent international and regional organizations, such as the World Bank and the Arab Fund for Economic and Social Development. These collaborations facilitate access to affordable concessional loans for banks and microfinance institutions, thereby significantly enhancing financial accessibility for MSMEs. Improving MSMEs' access to finance remains a cornerstone of Jordan's broader financial inclusion strategy.

Robust Regulatory Oversight and Macroprudential Policies

On the regulatory front, the CBJ diligently enforces stringent standards across the entire financial sector. Crucially, a comprehensive macroprudential policy framework is actively in place to effectively mitigate systemic risks and preserve overall financial stability, ensuring the banking system remains robust against potential shocks.

Resilience of the Jordanian Banking Sector

The Jordanian banking sector continues to demonstrate remarkable resilience, underpinned by strong financial and monetary fundamentals. As of June 2025, total assets grew by 5.6% year-over-year, reaching JD 71.4 billion ($100.7 billion). Deposits expanded to JD 48.2 billion, while credit facilities saw a 3.9% increase, amounting to JD 35.5 billion.

Financial soundness indicators remain exceptionally solid. By the end of 2024, the capital adequacy ratio stood at a robust 18%, significantly exceeding the Basel III requirement of 10.5%. Liquidity levels were also strong, with a ratio of 144.7% against the required 100%. Non-performing loans (NPLs) were well-contained at 5.6%, complemented by a healthy coverage ratio of 74.5%. Furthermore, the sector's profitability improved, with a Return on Assets (ROA) of 1.1% and a Return on Equity (ROE) of 9.1%.

Navigating Future Horizons: Challenges and Strategic Imperatives

Maintaining monetary stability is the CBJ's paramount objective, particularly amidst persistent external shocks. The bank is committed to anchoring economic resilience by preserving the Jordanian dinar's peg to the US dollar, sustaining robust foreign reserves, and ensuring inflation remains contained within target levels. Looking ahead, the CBJ is actively working to adapt to ongoing structural shifts in the global economy. Its main priorities include navigating the complexities of technological transformation, strengthening cybersecurity defenses, addressing emerging climate risks, and promoting sustainable finance initiatives across the financial system.

Embracing Innovation: The Future of Fintech and Digital Currencies

Fintech and digital currencies are rapidly becoming indispensable components of financial systems worldwide, and Jordan recognizes their transformative potential. The nation views these technologies as a significant opportunity to enhance financial inclusion, broaden access to diverse financial services, and significantly improve efficiency across both banking and commercial operations. As Jordan wholeheartedly embraces digital transformation, the integration of Information and Communication Technologies (ICT) within financial institutions has intensified, leading to greater efficiency in service delivery and customer experience.

In response to these advancements, the CBJ has articulated a clear vision: "Supporting economic growth, resilience, and prosperity for all Jordanians by establishing Jordan as a regional hub for fintech innovation, which enhances inclusion, improves efficiency, and strengthens customer experiences." This vision underscores Jordan's commitment to becoming a leader in financial technology in the region, leveraging innovation for the benefit of all its citizens.