meed-logo

line1 line2 line3
SIGN IN / REGISTER

Jordan economy nears inflection point

11 June 2025

 

Jordan’s leaders are well-versed in dealing with the economic fallout from regional turmoil, but the past year has stress-tested this crisis management strategy to the limit.

With President Donald Trump raising questions about future US financial support for Jordan, and halting grants for a large water desalination project on taking office, anxiety levels in Amman have risen substantially this year.

In 2024, US aid covered around 20% of Jordan’s government budget deficit, so the concern is understandable. Added to this is the threat of the reciprocal tariffs announced in April, which could hit Jordan with a 20% rate – thereby pushing it into the top 10 most affected economies in the world – and the Hashemite kingdom’s concerns about the Trump administration’s actions are grounded in reality. For while Jordan should be able to negotiate down its tariffs, its exports to the US – one-quarter of its total – may still feel the imprint.

All this comes on top of the regional headwinds that have hit economic growth and placed additional strain on already pressured public finances. The Washington-based IMF sees GDP growth being held back at 2.6% this year, down from 3.1% in 2023 – the year before the full hit of the Gaza conflict was registered. However, the fund also noted that a stronger export performance is offsetting weaker domestic demand.

Even so, the spillovers from the Palestine conflict, especially in Jordan’s tourism sector, which accounts for 15% of GDP, will remain a policy challenge.

Capital Economics warned Jordan’s economy would continue to struggle due to the effects of regional conflict and fiscal constraints. The consultancy says a budget contraction of at least 4% of GDP is required to stabilise and lower the public debt-to-GDP ratio, but this may prove too tall an order for the government and would certainly weigh on its GDP growth.

Lower growth has long-term consequences for Jordan, given its stubbornly high unemployment rate (averaging above 20% since 2020) and low labour force participation rate.

On the more positive side, the IMF sees inflation remaining low, at about 2%, reflecting the Central Bank’s commitment to monetary stability and the exchange rate peg. However, the current account deficit is projected to widen slightly to just under 5% of GDP in 2025, from under 4% in 2023, due to lower tourism receipts and lower prices for key exports. 

The banking sector remains well-capitalised, with a capital adequacy level well above the regulatory minimum of 12%, noted the IMF. Non-performing loans remain relatively low.

Stress test results for the banking sector in 2024 suggested it is broadly able to withstand shocks even under the most severe scenarios. Bank mergers are also on the agenda, with Bank Al-Etihad preparing to acquire Investbank in what would be the country’s largest-ever banking consolidation.

US U-turn

Looking ahead, Jordanian officials believe the worst might be averted, having secured assurances from the White House that most foreign aid to Jordan – under which it receives an annual $1.45bn from the US – will survive intact and not be used as leverage in talks.

The reported resumption in March 2025 of payments from US firm CDM Smith, tasked with overseeing the $5bn Aqaba-Amman Water Desalination and Conveyance Project, will have come as welcome reassurance.

“What’s interesting is that the US quietly restarted the funding to Jordan, and we know King Abdullah has visited Washington DC a number of times, meeting with Trump administration officials,” says Annelle Sheline, a research fellow at the US-based Quincy Institute, and a former foreign affairs officer at the US State Department.

“Jordan has been very careful to cultivate relationships among both Republicans and Democrats, and that will have played a role in restarting this funding to Jordan.”

In addition, Jordan has secured funding from alternative sources, including the EU, which in January committed to extending a €3bn ($3.13bn) financial package. The 2025-27 package will include €640m in grants, €1.4bn in investments and €1bn in macro-financial assistance.

Despite these welcome support measures, analysts point out that the changing regional political weather may compromise Jordan’s capacity to attract financial support in future.

“Jordan has lost some of its value because of the Abraham Accords. It used to have a moderate Arab state role, with a relationship with Israel. But the value of that has really gone down. That’s why King Abdullah has been spending time in DC lobbying because he doesn’t know what Trump is going to come up with next,” says Neil Quilliam, associate fellow at the Middle East and North Africa programme at Chatham House.

Syrian opportunity

One factor that might positively impact Jordan’s economic prospects is the regime change seen late last year in its large neighbour Syria.

Jordanian figures show exports to Syria rose almost five-fold in the first two months of the year, reaching JD35.4m ($48.9m) compared to just JD6.1m ($8.5m) in the same two months of 2024.

Syria’s rehabilitation should also assist in the return of Syrian refugees from Jordanian territory, which number more than 500,000, reducing the considerable burden placed on Jordan’s economy. Further ahead, Syria’s sizeable reconstruction needs will put Jordan in an advantaged position to provide labour and construction materials.

“Syria’s opening is going to be beneficial in terms of trade,” says Quilliam. “Jordan isn’t necessarily going to be competing with Syria. The Saudis, the UAE, Qatar and Kuwait have been putting money into Jordan for quite a long time. And Syria is going to require a lot of construction materials that Jordan will be a transit for.”

Moving forward, Jordan may have a harder time getting funding out of Congress
Annelle Sheline, Quincy Institute

Fiscal jeopardy

The biggest cloud on the horizon is Jordan’s ability to maintain US funding over the long term.

The nearly $1.5bn a year that comes into Jordan from the US is authorised on a four-year cycle and so will have to be renewed at some point during the Trump presidency.

“That’s going to be the inflection point. They could be fine now for the next two years, but it’s going to get interesting,” says Quilliam.

As Sheline notes: “It [could be an] uphill battle, given Republican members of Congress were willing to vote against previous foreign aid, which suggests they would be willing to vote against funding for Jordan – given the perception that the US spends too much on sending money abroad. Moving forward, Jordan may have a harder time getting funding out of Congress.”

While the kingdom has overcome previous funding crises, and the prevailing logic is that Amman always muddles through, with a debt-to-GDP ratio of around 95%, the kingdom has remarkably little fiscal room in which to manoeuvre.

“The ratchet just gets tighter and tighter each year,” says Quilliam. “And it’s just getting closer and closer to something going wrong. If that $1.5bn from the US stops, then they’re in real trouble. That’s the backstop.”

MEED's July 2025 report on Jordan also includes: 

> GAS: Jordan pushes ahead with gas plans

https://image.digitalinsightresearch.in/uploads/NewsArticle/14040998/main.gif
James Gavin

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Egypt prepares to tender five water treatment plants

    25 May 2026

    Egypt is preparing to tender five seawater desalination and industrial wastewater treatment plants under its public-private partnership (PPP) programme.

    The projects will be offered to local and international investors through competitive PPP tenders, Atter Hannoura, head of the PPP unit at the Finance Ministry, has told a local Arabic news channel.

    The first of these involves a plant in the Suez Canal Economic Zone, which will be launched “immediately after the Eid Al-Adha holiday”, Hannoura said.

    In January 2025, MEED exclusively reported that SCZone Istithmar had invited interested firms to prequalify to bid for a contract to develop a seawater desalination plant in the Suez Canal Economic Zone.

    SCZOne Istithmar is wholly owned by the General Authority for Suez Canal Economic Zone.

    The Finance Ministry’s PPP Central Unit, along with the European Bank for Reconstruction & Development, is supporting SCZone Isthithmar in the project’s tender proceedings.

    The opportunity entails a long-term water-purchase agreement to design, finance, build, operate, maintain and transfer the plant’s ownership.

    It was previously reported that this planned seawater desalination plant will have a capacity of 250,000 cubic metres a day (cm/d). 

    Hannoura added that the government is in negotiations with several companies, including Saudi Arabia-based Acwa, regarding large-scale desalination projects.

    Additionally, the government plans to tender four industrial wastewater treatment plants, with the first two projects expected to be launched “within 45 days”.

    One of these will be located in the Amreya industrial area in Alexandria, while the other will be in the Abu Rawash area in Giza, Hannoura said. Details of the other projects were not disclosed.

    Alexandria wastewater treatment plant

    The Authority for Potable Water and Wastewater is planning to build a wastewater treatment plant in eastern Alexandria.

    The $150m facility will have a water treatment capacity of 300,000 cm/d.

    In June 2025, Egypt’s government approved a financing and grant agreement for the project, with financing from the French Development Agency amounting to €68m and a grant of €2m.

    Expression of interest documents were previously submitted in September 2024.

    The main contract for this plant had been expected to be released in June.

    Wastewater upgrades

    Separately, the Construction Authority for Potable Water & Wastewater retendered the phase four expansion of the Abu Rawash wastewater treatment plant in Giza Governorate in January.

    The $157m scheme will be developed under a design, build, operate and maintain contract.

    The plant will have a treatment capacity of 400,000 cm/d, rising to peak flows of 520,000 cm/d. The authority issued the initial main contract tender last August. 

    It is unconfirmed whether this has moved beyond the bidding stage.

    Egypt currently produces between 1.5 million cm/d and 2 million cm/d of desalinated water. The country aims to increase capacity to between 8 million cm/d and 9 million cm/d by 2050.

    In March, Egypt’s cabinet approved a $1.2m grant agreement with the European Investment Bank to support wastewater treatment upgrades in Alexandria and Damietta.

    Part of the funding will support plans to expand the Hanovil wastewater treatment plant in Alexandria Governorate.

    The project will add 50,000 cm/d of treatment capacity in two phases within the plant’s existing footprint. Once completed, the facility will reach a total capacity of 100,000 cm/d.

    The grant will also support expansion works at the Kafr El-Battikh wastewater treatment plant in Damietta Governorate.

    The facility currently receives more than 7,000 cm/d of wastewater, while its treatment capacity is 3,000 cm/d.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16980726/main.jpg
    Mark Dowdall
  • Momentum builds for Syrian projects

    25 May 2026

     

    Support from the US, as well as the closure of the Strait of Hormuz, has increased expectations about the development of infrastructure projects in Syria.

    On 22 May, the US published guides to investing in Syria, funded by the US Department of State, that pointed investors towards 590 planned projects in the country.

    The permanent removal of US sanctions in December last year, combined with fallout from the closure and disruption to shipping through the Strait of Hormuz, has boosted interest in planned projects in the country.

    Shipping through the Strait of Hormuz has been disrupted since the US and Israel attacked Iran on 28 February.

    The route normally transports about 11 million barrels a day of oil and around 20% of the world’s liquefied natural gas, as well as a range of other key materials and consumer goods.

    The disruption to shipping through the strait has left nations in the Middle East scrambling to find new routes for imports and exports – and Syria plays a role in many of these new plans.

    This has bolstered the country’s plans to become a regional trade hub.

    Energy corridors

    Already, Iraq is moving a large volume of oil by truck across the country to export it from Syria’s Mediterranean ports, such as Latakia or Tartous.

    In April, Iraq’s state-owned oil marketing company, Somo, said it had awarded contracts to supply about 650,000 metric tonnes of fuel oil per month for overland trucking across Syria.

    On top of this, Iraq is currently looking into reestablishing a pipeline route that transported oil from Kirkuk to the port of Baniyas in Syria.

    The pipeline originally went into operation in April 1952.

    During the 2003 invasion of Iraq, the pipeline was damaged by US air strikes and has remained out of operation since then.

    There have been repeated attempts to either refurbish the existing pipeline or build a new one along the same route, but none has been successful.

    In December 2007, Syria and Iraq agreed to rehabilitate the pipeline. The pipeline was to be reconstructed by Stroytransgaz, a subsidiary of Russia’s Gazprom.

    However, Stroytransgaz failed to start the rehabilitation, and the contract was nullified in April 2009.

    The disruption to shipping through the Strait of Hormuz has added a new urgency to the project to reestablish pipeline flows from Iraq to Baniyas.

    Syria could also play a role in plans for a pipeline to transport gas from Qatar to Europe via Syria and Turkiye.

    The country could additionally form part of plans to rehabilitate and expand the Arab Gas Pipeline.

    The pipeline connects Egypt, Jordan, Syria and Lebanon, although the Lebanese section is not currently operational.

    Trade routes

    Beyond oil and gas, Syria is emerging as a key part of other plans for new trade routes.

    Earlier this month, Syria’s Transport Minister Yarub Badr said the country was seeking to restore its role as a regional transit corridor linking Europe and the Gulf by reviving cross-border trucking and rehabilitating railway connections with neighbouring countries.

    He said the overland corridor between the Turkish and Jordanian borders handled between 100,000 and 115,000 trucks annually in both directions before 2011. Freight rail services also operated between Tartous port and Iraq’s Umm Qasr port via Baghdad in 2009, he added.

    He said Syria was coordinating with Turkiye, Jordan and Saudi Arabia to simplify customs and border-crossing procedures and facilitate freight movement.

    Railway rehabilitation is expected to take longer due to extensive infrastructure damage and the suspension of cross-border rail links over the past decade.

    Badr said Syria is working with the World Bank to secure grants ranging between $65m and $200m to support railway rehabilitation and restore Syria’s role as a regional transit route linking Turkiye, Syria, Jordan and Iraq.

    Earlier this month, Syria’s state-owned railway company, the General Establishment for Syrian Railways, and the operator of Syria’s Latakia International Container Terminal signed a memorandum of understanding to coordinate container traffic between the Mediterranean port of Latakia and inland freight hubs.

    The framework covers feasibility studies for moving containers by rail from Latakia to dry ports in Adra, Hasiya and Aleppo.

    The feasibility studies are expected to take four months to complete.

    Tartous port

    Also this month, executives from the UAE’s DP World and Syria’s General Authority for Borders and Customs (GABC) met to discuss accelerating the development of Syria’s Port of Tartous.

    Essa Kazim, chairman of DP World, met with Qutaiba Ahmed Badawi, chairman of GABC, to discuss opportunities to enhance infrastructure and logistics efficiency, ensuring the Port of Tartous is well-equipped to handle the anticipated rise in trade and cargo volume.

    DP World’s plans to develop the Port of Tartous form part of a 30-year concession agreement signed in July 2025 with the Syrian government.

    Under the agreement, DP World committed to invest $800m to upgrade infrastructure, expand capacity, and introduce modern cargo-handling and advanced digital systems.

    DP World has said that, by fast-tracking the development of the Port of Tartous, it aims to boost its operational efficiency and capacity to handle diverse cargo types, including general cargo, containers, breakbulk and roll-on/roll-off traffic.

    Rizwan Soomar, DP World’s chief executive and managing director for Central Asia, the Levant and Egypt, said: “The Port of Tartous development marks a defining moment in Syria’s journey of economic recovery and modernisation of its trade infrastructure. We are proud to contribute to this vital phase of growth.”

    Located on Syria’s Mediterranean coast, the Port of Tartus is the country’s second-largest port and a key maritime gateway to trade routes across Europe, the Levant and North Africa.

    Beyond the port itself, DP World is exploring other opportunities to develop infrastructure in Syria with local stakeholders. These include logistics zones, inland freight hubs and transit corridors.

    US interest

    US-based companies are also showing significant interest in participating in new projects in the country.

    On 19 May, a delegation from the Houston-headquartered engineering company KBR travelled to Damascus to discuss road networks and infrastructure projects in Syria.

    During one meeting, Syria’s transport minister outlined strategic projects currently underway, including north-south and east-west corridor projects, the Damascus-Aleppo highway and railway initiatives.

    Badr said that companies were needed to update economic and technical studies for some projects.

    While Syria and the US both have bold ambitions to expand Syria into a regional trade and logistics hub, the poor state of the country’s infrastructure is likely to be a key challenge.

    It is likely that billions of dollars will need to be invested to rehabilitate the country so that its capacity to transport goods returns to levels seen prior to the civil war that began in March 2011.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16975219/main.jpg
    Wil Crisp
  • Alec confirms Sphere Abu Dhabi contract award

    25 May 2026

    Alec Holdings has confirmed that its subsidiary Alec Engineering & Contracting has received a letter of award for the construction contract for the $1.7bn Sphere Abu Dhabi project.

    MEED had previously reported that Alec was the selected contractor and had been working on the project during the pre-construction phase. The construction is due to be completed in the third quarter of the financial year 2029.

    Abu Dhabi’s Department of Culture & Tourism (DCT Abu Dhabi) and US-based Sphere Entertainment announced earlier in May that they have selected Yas Island as the location for the project.

    The venue will be built on a plot between Yas Mall and SeaWorld Abu Dhabi, close to Yas Island’s theme parks and attractions. The project will be the first Sphere venue outside the US. It is expected to echo the scale of Sphere Las Vegas, with a capacity of up to 20,000 depending on configuration.

    DCT and Sphere Entertainment finalised an agreement last year for the construction, development and operation of the Sphere entertainment venue in Abu Dhabi. According to the agreement, Sphere Entertainment granted DCT the exclusive rights to build and operate the Sphere Abu Dhabi entertainment venue.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16973522/main.jpg
    Colin Foreman
  • Consultant wins Jeddah metro design

    22 May 2026

     

    French engineering firm Egis has been appointed to undertake the preliminary design consultancy for the Jeddah Metro Blue Line project.

    The project client, Jeddah Development Authority, issued the tender in early January, when MEED exclusively reported that Saudi Arabia had restarted plans to build the Jeddah Metro.

    Engineering consulting firms submitted bids in April, as MEED reported.

    The Blue Line will run from King Abdulaziz International airport and connect to the Haramain high-speed railway station.

    The line will be 35 kilometres (km) long and will include 15 stations.

    Project history

    Plans for the Jeddah Metro were first publicly floated in the early 2010s and were formally packaged into a wider Jeddah public transport programme around 2013-14.

    In 2014, French engineering firm Systra was appointed to complete preliminary engineering for the Jeddah Metro, as MEED reported at the time.

    In the same year, US-based engineering firm Aecom was awarded a SR276m ($74m) contract to provide pre-programme management consultancy services.

    Under its 18-month contract, Aecom was expected to provide staff to support preliminary planning and design work for various phases of the metro project.

    This was followed by the appointment of UK-based architectural firm Foster + Partners in 2015 to design the metro stations.

    The project then stalled as government spending priorities were reset and major capital programmes were reviewed following the fall in oil prices in 2015, with the metro’s scope, cost and delivery model coming under reassessment.

    Early concept designs envisaged a multi-line network integrated with buses and, later, other city-wide mobility upgrades.

    Route details

    According to Jeddah Transport Company’s website, the scheme comprises 81 stations and 197 trains serving more than 161km. The network will have four lines:

    • Orange Line: a 44.8km line running along Al-Madinah Road and Old Makkah Road, with 29 stops including one at Obhur Bridge
    • Blue Line: a 35km line running from King Abdulaziz International airport to the Haramain high-speed railway station, with 15 stations
    • Green Line: a 17km line running through the city centre, from the downtown area to the Haramain railway station, with nine stops
    • Red Line: A 59.7km line running from King Abdullah Stadium north to Old Makkah Street through King Abdulaziz Road and King Abdullah Road, with 25 stops

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949416/main.jpg
    Yasir Iqbal
  • Expo Riyadh tenders Saudi Arabia pavilion

    22 May 2026

     

    Expo 2030 Riyadh Company (ERC), tasked with delivering the Expo 2030 Riyadh venue, has tendered a contract to build the Saudi Arabia pavilion at the site.

    The tender was issued on 19 May, with a bid submission deadline of 26 August.

    The pavilion is a major asset located within the KSA District on the eastern side of the Expo 2030 Riyadh masterplan, within the Loop of Nations district.

    The tendering of the pavilion structure follows swift progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covers the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covers about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communication systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor
    • Lot 2 includes the northern cluster of the nature corridor
    • Lot 3 comprises the southern cluster of the nature corridor 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport, and will provide direct access to various landmarks within Riyadh.

    The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, launched ERC – a wholly owned subsidiary – in June last year to build and operate facilities for Expo 2030.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949696/main.jpg
    Yasir Iqbal