meed-logo

line1 line2 line3
SIGN IN / REGISTER

Jordan economy holds a steady course

7 June 2023

MEED's July 2023 report on Jordan also includes:

> OIL & GAS: Jordan's oil and gas sector battles sluggish phase
> POWER & WATER: Jordan sustains utility infrastructure progress
> CONSTRUCTION: Hospital boost for Jordan construction

 

With attention absorbed by the royal wedding of Jordan's Crown Prince Hussein bin Abdullah and Saudi architect Rajwa al-Saif in early June, the release of unemployment figures for the first quarter of 2023 showing joblessness at almost 22 per cent suggested it might have been a good day to bury bad news.

Stubbornly high unemployment is only one challenge facing the Hashemite Kingdom. Rising costs have also roused demonstrations. Last December, professional drivers took to the streets to protest against fuel price rises, a side effect of the imposition of IMF-backed fuel subsidy reforms that resulted in a doubling of prices.

And yet, broader inflationary pressures have been mitigated by significant strategic wheat reserves and long-term gas supply arrangements. The country’s dollar peg has also limited foreign exchange volatility.

Inflation still poses a significant risk, say analysts. “Jordan has been largely shielded from the high inflationary pressures affecting the world. However, the country inevitably faced higher prices as both food and fuel supplies have been affected by Russia’s war on Ukraine,” says Farah el-Rafei, Jordan economist at consultancy Oxford Economics.

“If inflation spikes again, this could put significant pressure on the government, given stagnant wages and high unemployment.”

Institutional acclaim

The government’s economic management has won plaudits from the IMF and ratings agencies. The IMF’s most recent assessment issued in May found that despite a challenging global and regional environment, Jordan has managed to maintain macroeconomic stability and access to international capital markets through prudent monetary and fiscal policies.

The fund lauded the kingdom’s post-pandemic recovery, projecting real GDP growth rise to 2.7 per cent in 2023, and inflation for the year to moderate to 3.8 per cent.

This has afforded space to tackle the country’s indebtedness, with ambitions to reduce public debt to 80 per cent of GDP by 2028, from around 90 per cent now. This will be achieved by continued efforts to broaden the tax base, and by improving the efficiency of public spending.  

“The country has made solid progress in implementing the structural reforms suggested by the IMF,” notes El-Rafei.

“Activity has increased via higher tourism and export revenues carried over from 2022, and this momentum is likely to be maintained in 2023.”

If inflation spikes again, this could put significant pressure on the government, given stagnant wages and high unemployment
Farah el-Rafei, Oxford Economics

Persisting difficulties

Despite Jordan’s cushioning against inflation, particularly with food stocks, there is an expectation that rises in prices in the region will inevitably catch up on growth efforts this year. 

Another risk stems from the dollar peg, where higher interest rates raise the cost of borrowing.

“While the US Federal Reserve announced a potential end to the rate hikes, leaving the rates as high as they are for an extended period might suffocate investment in Jordan,” says El-Rafei.

Jordan’s external deficit remains high, reflecting the country’s high import burden. The current account deficit widened to 7 per cent of GDP in the first half of 2022. This external deficit is expected to persist in the short term as global inflation stabilises and regional exports and investments pick up. 

Though the IMF recommends continuing the prudent policies that have preserved macroeconomic stability, the government may find it increasingly difficult to increase tax revenues and change the composition of tax revenues. 

According to Nesreen Barakat, CEO of the Jordan Strategy Forum, total tax revenues are still hovering around 15 to 17 per cent of GDP, and most of these revenues (about 70 per cent) emanate from the country’s sales tax.  

“Broadening the tax base is proving difficult,” she says. “In addition, I wonder how the government can improve the efficiency of public spending when a few spending items, such as wages, pensions and interest payments on public debt, account for a large proportion of total public spending.”

Restrategising growth

Another challenge for Jordan is that merely sustaining the post-pandemic recovery may not be enough. 

In Barakat’s view, given the unemployment challenge, much stronger real GDP growth rates are needed. “Here, I am not confident that the Jordanian economy can achieve higher growth rates in the next few years,” she says.

“If we succeed in implementing the Economic Modernisation Vision’s initiative and public sector reform, we might have a good chance in the long term. Within this context, one cannot underestimate the importance of enhancing and increasing local investments as well as foreign direct investment.”

The Economic Modernisation Vision calls for the private sector to take the lead, accounting for 73 per cent of the total $58.8bn in investment. 

The three-phase vision aims to increase average real income per capita by 3 per cent annually, create 1 million jobs and more than double the nation’s GDP over 10 years. 

For the vision to be realised, a large pipeline of public-private partnership (PPP) schemes is needed, covering water desalination, school construction, clean energy, green hydrogen, transport improvement and road construction, among others. 

Barakat says the government should not just focus on 'large' PPP projects. “The private sector cannot get involved in large and long-term PPP projects,” she says.

“The absence of an active bond market in its primary and secondary aspects makes it impossible for them (entrepreneurs as well as banks) to get involved. I see the private sector getting involved in 'small' PPP projects. This is where the government should be instrumental in determining these projects and seeking private sector partnerships.”

Green opportunities

Another new avenue of thinking is a greater interest in climate spending.

Last year saw the launch of the government’s Green Economy Financing Facility (GEFF), supported by the European Bank for Reconstruction & Development, the Green Climate Fund and the EU, to help Jordan transition to a green economy.

Some $22m of funding via three GEFF deals has been disbursed to boost private sector investment in renewable energy and efficient utilisation of water and energy resources. The International Finance Corporation has also announced a $50m investment issued by the Jordan Kuwait Bank. 

“This is particularly significant as Jordan is considered among the most vulnerable to drought due to climate change, which remains a high risk due to capacity shortages,” says El-Rafei. 

Such long-term strategising will be key to developing Jordan’s economic potential. But in the meantime, there are near-term hurdles to navigate amid a challenging international context that is forcing higher borrowing costs. The danger remains that this could choke investment opportunities that are essential to Jordan’s recovery.  

https://image.digitalinsightresearch.in/uploads/NewsArticle/10921043/main.gif
James Gavin

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

Click here to register
Exclusive from Meed
Related Articles
  • Bahrain’s willingness to disrupt takes flight with Air Asia

    14 November 2025

    Commentary
    Colin Foreman
    Editor

    As the smallest economy in the GCC, Bahrain has long understood that its competitive edge lies in being agile and prepared to disrupt established economic models.

    This proactive approach began decades ago with the deregulation of its telecoms sector, positioning it ahead of many GCC peers in opening that market. More recently, the same strategic foresight emerged in the fintech space with the early adoption of regulatory sandboxes and a supportive digital finance ecosystem.

    Bahrain’s disruptive lens is now focused on the aviation sector. At the Gateway Gulf investor forum in Manama on 3 November, Bahrain signed a letter of intent with Malaysia-headquartered Capital A Berhad and Air Asia. The agreement covers the establishment of a hub in Bahrain as low-cost carrier Air Asia and its related businesses expand beyond Asia into new markets, including Europe and Africa.

    A hub in Bahrain, which is located to the west of its existing hubs in Asia, will allow Air Asia to connect to the European and African markets, allowing it to develop a network that will be a low-cost alternative to the full-service airlines based in the Gulf that also bridge east and west, including Bahrain’s flag carrier Gulf Air.

    Bahrain and Air Asia will not be competing on scale; instead, they will disrupt with lower prices. This agility will allow the kingdom to carve out a distinctive niche in an otherwise highly competitive market.

    The strategic pivot is made viable by recent, essential capital investment in aviation infrastructure. A new terminal building was opened at Bahrain International airport in 2022. This has significantly increased passenger capacity and modernised operations, creating an attractive platform for a major international low-cost carrier like Air Asia to base its extensive operations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15090817/main.gif
    Colin Foreman
  • Firms interested in Qiddiya high-speed rail revealed

    14 November 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Royal Commission for Riyadh City, in collaboration with Qiddiya Investment Company and the National Centre for Privatisation & PPP, have received interest from over 145 local and international companies for a contract to develop the Qiddiya high-speed rail project in Riyadh.

    These include 68 contracting companies, 23 design and project management consultants, 16 investment firms, 12 rail operators, 10 rolling stock providers and 16 other services firms.

    The lead developers and contractors that have expressed interest are:

    • Afcons Contracting Company / Shapoorji Pallonji (India)
    • Al-Omaier Trading & Contracting (local)
    • Al-Rashid Trading & Contracting Company (local)
    • Al-Rawaf Contracting (local)
    • Al-Ayuni Investment & Contracting Company (local)
    • AlBawani (local)
    • Al-Fahd Company (local)
    • Alghanim International (Kuwait)
    • Alkhorayef Water and Power Technologies (local)
    • Almabani General Contractors (local)
    • Amar (local)
    • Anjal Al-Khair Contracting (local)
    • Aviation Industry Corporation of China (China)
    • Bouygues Travaux Publics (France)
    • China Railway 18th Bureau Group (China)
    • China Harbour Engineering Company (China)
    • Built Industrial Company (local)
    • Cap France (France)
    • China Civil Engineering Construction Corporation (China)
    • China Machinery Engineering Corporation (China)
    • China Railway Construction Corporation (China)
    • China Railway International Group Co (China)
    • Copasa (Spain)
    • Dineshchandra R. Agrawal Infracon (India)
    • Dogus Insaat (Turkiye)
    • EDECS Contracting (Egypt)
    • El-Seif Engineering Contracting (local)
    • El-Soadaa Group (Egypt)
    • ElSewedy Electric (Egypt)
    • Esnad Contracting (local)
    • FCC Construccion (Spain)
    • Freyssinet (France)
    • Global Construction Development Solutions Company (local)
    • Gulermak (Turkiye)
    • Hassan Allam Construction (Egypt)
    • Hyundai Engineering & Construction (South Korea)
    • IC Ictas (Turkiye)
    • Imathia Construccion (Spain)
    • Kalyon Insaat (Turkiye)
    • Kolin Construction (Turkiye)
    • Larsen & Toubro (India)
    • Makyol (Turkiye)
    • Mapa Group (Turkiye)
    • Marubeni (Japan)
    • Mofarreh AlHarbi & Partners (local)
    • Mota-Engil (Portugal)
    • Mubarak Abdullah AlSuwaiket & Sons (local)
    • Nesma & Partners (local)
    • Nesma Infrastructure & Technology (local)
    • Nurol Construction (Turkiye)
    • Orascom Construction (Egypt)
    • Saudi Pan Kingdom (local)
    • Redco International (Egypt)
    • Rio Contracting (local) (local)
    • Rowad Modern Engineering (Egypt)
    • Safari Company (local)
    • Saipem (Spain)
    • Salcef (Spain)
    • Samama (local)
    • Samsung C&T Corporation (South Korea)
    • Saraya Al-Andalus (local)
    • Syneox (Cobra) (Spain)
    • The Arab Contractors (Egypt)
    • Twaik Holding (local)
    • UCC Holding (Qatar)
    • Webuild (Italy)
    • Yapı Merkezi (Turkiye)

    Expressions of interest have also been submitted by the following design and project management consultants:

    • Aecom (US)
    • AtkinsRealis (Canada)
    • Ayesa Engineering (Spain)
    • CH2M (USA)
    • Contrax International (UAE)
    • El-Raeid Consulting Engineers (Egypt)
    • Gensler (US)
    • Geoharbour (China)
    • Hatch (Canada)
    • Hill International (US)
    • Idom (Spain)
    • Introsoft Solutions (India)
    • Italferr (Italy)
    • KL Consults Associates (Malaysia)
    • Kunhwa Engineering and Consulting Company (South Korea)
    • Marrs Global (UK)
    • One Works (Italy)
    • PPMDC (local)
    • Rina Services (Italy)
    • Sener (Spain)
    • Surbana Jurong (Singapore)
    • Systra (France)
    • Typsa (Spain)

    Equity investors that expressed interest in the Qiddiya high-speed rail project are:

    • Aberdeen Investcorp (Bahrain)
    • AlGihaz Holding (local)
    • Almutlaq Real Estate Investment Company (local)
    • Arj Holding (local)
    • Foure Holdings (US)
    • Itochu Corporation (Japan)
    • Korea Overseas Infrastructure & Urban Development Corporation (Kind; South Korea)
    • Lamar Holding (local)
    • Mada International Holding (local)
    • Meritz Financial Group (South Korea)
    • MXB Investment (local)
    • Plenary (Australia)
    • Sojitz (Japan)
    • Tamasuk (local)
    • Vinci Concessions (France)
    • Vision Invest (local)

    The rail operators that submitted expressions of interest are as follows:

    • Alsa Grupo (Spain)
    • Alsaif Transportation Company (local)
    • DB International Operations (Germany)
    • Ferrovie dello Stato Italiane (Italy)
    • Intertoll Europe (Hungary)
    • Keolis (France)
    • Moventis (Spain)
    • MTR Corporation (Hong Kong)
    • Ratp Dev (France)
    • Renfe Operadora (Spain)
    • Serco (UK)
    • Transdev (France)

    Interest in the project was also expressed by the following 10 rolling stock and systems suppliers:

    • Alstom (France)
    • CAF (Spain)
    • Colas Rail (France)
    • CRRC (Hong Kong)
    • CRRC Changchun Railway Vehicles (China)
    • Hitachi Rail (Japan)
    • Hyundai Rotem (South Korea)
    • Siemens (Germany)
    • Stadler Rail (Switzerland)
    • Talgo (Spain)

    And finally, the other service providers that expressed interest in the project are:

    • Al-Nasser (local)
    • Alutec (Qatar)
    • Alvarez & Marsal (US)
    • Comatec (Finland)
    • Concrete Technology Company (UAE)
    • Generale Costruzioni Ferroviarie (Italy)
    • Hogan Lovells (UK)
    • Indra (Spain)
    • Intellex Consulting Services (US)
    • International SOS (UK)
    • Najd Wire Industries Company (local)
    • Rawasi Albina (local)
    • Smart Directions (local)
    • STC (local)
    • Workforce Staffing Solutions (UAE)
    • Zebraware (UK)

    The firms submitted their expressions of interest on 12 October, as MEED reported.

    The clients issued the notice to the market in September.

    The Qiddiya high-speed rail project will connect King Salman International airport and King Abdullah Financial District (KAFD) in Riyadh with Qiddiya City.

    Also known as Q-Express, the railway line will travel at speeds of up to 250 kilometres an hour, reaching Qiddiya in 30 minutes.

    The project was previously planned to be developed under a conventional model, but will now progress under a public-private partnership (PPP) model.

    The line is expected to be developed in two phases. The first phase will connect Qiddiya with KAFD and King Khalid International airport.

    The second phase will start from a development known as the North Pole – which is understood to include the Public Investment Fund’s proposed 2-kilometre-tall tower – and travel to the New Murabba development, King Salman Park, central Riyadh and Industrial City in the south of Riyadh. 

    In November 2023, MEED reported that French consultant Egis had been appointed as the technical adviser for the project.

    UK-based consultancy Ernst & Young is acting as the transaction adviser on the project. Latham & Watkins is the legal adviser.

    Qiddiya is one of Saudi Arabia’s five official gigaprojects and covers a total area of 376 square kilometres (sq km), with 223 sq km of developed land. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15090776/main.gif
    Yasir Iqbal
  • Meraas awards $120m Citywalk expansion project deal

    14 November 2025

    Register for MEED’s 14-day trial access 

    Local real estate developer Meraas has awarded a AED440m ($120m) contract for the construction of the Northline residential project in the Al-Wasl area of Dubai.

    The contract was awarded to the local GCC Contracting Company.

    The project includes the construction of three residential buildings. Construction works are expected to begin shortly and the project is slated for completion by 2027.

    The enabling works were undertaken by the local International Foundations Group.

    The project is part of the recently announced City Walk expansion project.

    In June, Merass announced the City Walk Crestlane project as it continued its expansion of the City Walk residential community.

    City Walk Crestlane comprises two residential towers offering 198 one- to five-bedroom units.

    The project is expected to be completed and handed over by the third quarter of 2028.

    Meraas’ latest project contract award in Dubai is backed by heightened real estate activity in the UAE’s construction market. Schemes worth over $323bn are in the execution or planning stages, according to UK analytics firm GlobalData.

    The company forecasts that the output of the UAE’s construction sector will grow by 4.2% in real terms in 2025, supported by developments in infrastructure, energy and utilities, as well as residential construction projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15090114/main.png
    Yasir Iqbal
  • Contractors prepare bids for Aramco gas compression project

    13 November 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Aramco is making progress with the main contract tendering process for a project to boost gas compression capacity at the Shedgum and Uthmaniya processing plants in the kingdom’s Eastern Province.

    The Shedgum and Uthmaniya plants currently receive approximately 870 million cubic feet a day (cf/d) and 1.2 billion cf/d of Khuff raw gas, respectively.

    Through this multibillion-dollar project, Aramco aims to increase the compression and processing capacity of the two plants, as well as to construct new pipelines to enhance gas transport.

    Contractors are preparing bids for several engineering, procurement and construction (EPC) packages of the Shedgum and Uthmaniya gas compression capacity expansion project. Aramco has set a bid submission deadline of 17 November, according to sources.

    The Saudi energy giant is understood to have started the solicitation of interest process for the main EPC contract tendering exercise in the fourth quarter of last year.

    Aramco then issued the tenders for the EPC packages of the scheme during the second quarter of this year and set an initial bid submission deadline of 17 August, the sources said.

    In line with its aim of increasing gas production and processing capacity by 60% by 2030, with 2021 as its baseline, Aramco is investing significant capital in gas projects in the kingdom this year.

    Aramco’s capital expenditure (capex) in the third quarter of 2025 stood at $12.55bn, a marginal year-on-year increase of 2%. For the first nine months of the year, the firm registered capex of $37.41bn, an increase of 3.38% compared to the same period last year.

    The company previously announced capital investment guidance in the range of $52bn-$58bn for 2025, excluding around $4bn of project financing.

    ALSO READ: Aramco turns attention to strategic projects

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15075053/main4642.jpg
    Indrajit Sen
  • Aramco Stadium races towards completion

    12 November 2025

     

    Register for MEED’s 14-day trial access 

    The Aramco Stadium in Khobar is moving forward at an impressive pace as the fast-track project races towards completion in 2026.

    The 47,000-seat stadium will be the new home for the Aramco-owned Al-Qadsiah Club and a key venue for the 2027 AFC Asian Cup and the 2034 Fifa World Cup. 

    The project’s progress stems from detailed planning and an accelerated delivery strategy. The project was conceived in May 2023, with the design process, managed by Aramco, commencing shortly thereafter. 

    “We completed the design within six months,” said Mohammed Subhi, the Aramco Stadium’s project manager.


    The project advanced quickly due to thorough planning and a fast-track delivery approach. Initiated in May 2023, the design phase—overseen by Aramco—was completed within six months

    An early engagement approach with the main contractor – a joint venture of Besix and Al-Bawani – was instrumental in maintaining momentum. This partnership began early in 2024, allowing for collaborative input on critical construction elements. 

    This upfront collaboration minimised pre-construction time, ensuring a rapid transition to site work.

    Engineering challenges

    The stadium’s architectural design, inspired by the natural whirlpools of the Gulf and featuring interwoven transparent sails, presents significant engineering challenges, particularly in the structural steel and façade work. For spectator comfort, the stadium is equipped with full cooling systems and designed to the highest international standards.

    Logistics management is another crucial facet of the project, which is located in central Khobar. With thousands of workers on site, the movement of materials is tightly controlled to minimise community disruption. 

    “We control how many trucks can enter the site and at what time. For example, we cannot cast concrete during the day. It has to be after 6pm, up until the early morning,” said Subhi.

    A key priority on site is health and safety, an area where the organisation’s legacy from its oil and gas operations is clearly visible. Subhi explains that the principle of health and safety is part of the company’s DNA and is embodied in the deployment of advanced technology and rigorous standards, which have collectively resulted in over 10 million safe working hours to date.

    The project employs a sophisticated Smart Safety Command Centre (SCC), which utilises artificial intelligence-based monitoring and 24/7 surveillance. One key feature of the centre is the crane collision prevention system – a key technological advancement in heavy machinery coordination and a first for the region. 

    “We have tower cranes and crawler cranes talking to each other. The anti-collision system means cranes talk to each other without human interference, and they automatically shut down when they are too close to each other,” said Subhi.


    A key technological advancement is the crane collision prevention system, which means the cranes talk to each other and shut down if they become too close

    In addition to ground operations, the project is leveraging aerial technology to mitigate risk in high-altitude work.

    “We have used drones for the inspection of the cranes and inspection of the steel structure itself to minimise the risk of working at height,” said Subhi.


    Drones have been adopted on-site to mitigate the risk of working at height

    Worker welfare

    The project’s commitment extends beyond mere regulatory compliance to comprehensive worker welfare, establishing a high standard for construction sites in the region. 

    With current staffing reaching approximately 11,000 direct and indirect workers, welfare provisions are a core priority, linking directly back to Aramco’s corporate standards.

    In a region where extreme heat is a constant challenge, the project has implemented advanced heat stress management protocols. This includes the installation of heat sensors with alarm systems, mandatory work stoppage during peak heat hours and regular briefings on heat exhaustion symptoms. Fully air-conditioned rest areas are provided for breaks and meals.

    Aramco is also committed to developing national talent. A significant proportion of the staff are young, and about 20% of the team are women.

    The relationship with the joint-venture contractor is defined by collaboration rather than traditional client-contractor hierarchy. “We are one team, working together,” said Subhi. This approach has fostered a cooperative environment that is accelerating the on-site progress towards the 2026 completion goal. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15073939/main.gif
    Colin Foreman