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
  • Contractors submit bids for Saudi gas processing plant project

    8 May 2026

     

    Contractors have submitted bids to Saudi Aramco subsidiary Aramco Gulf Operations Company (AGOC) for a project to build an onshore gas processing plant in Saudi Arabia’s Khafji that will draw and process gas from the Dorra offshore gas field, located in waters of the Saudi-Kuwait Neutral Zone.

    MEED previously reported that AGOC had divided the engineering, procurement and construction (EPC) on the Khafji gas plant project into seven packages, and issued the main tenders for those last year.

    Contractors were initially set deadlines of 24 October for technical bid submissions and 9 November for commercial bids. AGOC later extended the bid submission deadline to 22 December, and then until 22 April. A final deadline of 30 April was set, with contractors submitting bids by that date, according to sources.

    The seven EPC packages cover works including open-art and licensed process facilities, pipelines, industrial support infrastructure, site preparation, overhead transmission lines, power supply systems and main operational and administrative buildings, with their breakdown as follows:

    • Package 1 – Open-art facilities
    • Package 2 – Licensed facilities
    • Package 3 – Industrial support facilities
    • Package 4 – Pipelines
    • Package 5 – Site preparation
    • Package 6 – Overhead transmission lines plus power supply (from Saudi Electricity Company)
    • Package 7 – Headquarters complex

    Saudi Arabia and Kuwait have been pressing ahead with their plan to jointly produce 1 billion cubic feet a day (cf/d) of gas from the Dorra gas field.

    The two countries have been producing oil from the Neutral Zone – primarily from the onshore Wafra field and offshore Khafji field – since at least the 1950s. With a growing need to increase natural gas production, they have been working to exploit the Dorra offshore field, understood to be the only gas field in the Neutral Zone.

    Discovered in 1965, the Dorra gas field is estimated to hold 20 trillion cubic metres of gas and 310 million barrels of oil.

    The Khafji gas plant project is one of three multibillion-dollar projects launched by subsidiaries of Saudi Aramco and Kuwait Petroleum Corporation (KPC) to produce and process gas from the Dorra field that has advanced in recent months.

    Dorra field facilities project

    Al-Khafji Joint Operations (KJO), which is jointly owned by AGOC and KPC subsidiary Kuwait Gulf Oil Company (KGOC), has divided the scope of work on the Dorra field facilities project into four EPC packages – three offshore and one onshore.

    India’s Larsen & Toubro Energy Hydrocarbon (L&TEH) won the contract for package one of the Dorra facilities project, which covers the EPC of seven offshore jackets and the laying of intra-field pipelines. The contract awarded by KJO to L&TEH is estimated to be valued at $140m-$150m, MEED reported in October.

    Additionally, Italian, Indian and Spanish contractors have emerged as the lowest bidders for the other three EPC packages that form part of the Dorra facilities project.

    A consortium of Italian contractor Saipem and L&TEH is understood to have submitted the lowest bid for offshore packages 2A and 2B, according to sources. The only other consortium understood to have submitted bids for packages 2A and 2B comprises Abu Dhabi-based NMDC Energy and South Korea’s Hyundai Heavy Industries.

    The EPC scope of work for package 2A includes Dorra gas field wellhead topsides, flowlines and umbilicals. Package 2B involves the central gathering platform complex, export pipelines and cables.

    Spanish contractor Tecnicas Reunidas is understood to have emerged as the lowest bidder for onshore package three, sources told MEED. Package three covers the EPC of onshore gas processing facilities.

    KGOC onshore processing facilities

    The third component of the overall Dorra gas field development programme is a planned onshore gas processing facility to be built in Kuwait, which has been undertaken by KGOC.

    KGOC had been progressing with the front-end engineering and design (feed) work on the project, before the destabilising impact of the US-Israel conflict with Iran compelled the operator to put the project on hold, MEED reported in April.

    The proposed facility, estimated to be worth $3.3bn, will receive gas from a pipeline from the Dorra offshore field, which is being separately developed by KJO. The complex will have the capacity to process up to 632 million cf/d of gas and 88.9 million barrels a day of condensates from the Dorra field.

    The facility will be located near the Al-Zour refinery, owned by another KPC subsidiary, Kuwait Integrated Petroleum Industries Company.

    A 700,000-square-metre plot has been allocated next to the Al-Zour refinery for the gas processing facility and discussions regarding survey work are ongoing. The site could require shoring, backfilling and dewatering.

    The onshore gas processing plant will also supply surplus gas to KPC’s upstream business, Kuwait Oil Company, for possible injection into its oil fields.

    Additionally, KGOC plans to award licensed technology contracts to US-based Honeywell UOP and Shell subsidiary Shell Catalysts & Technologies for the plant’s acid gas removal unit and sulphur recovery unit, respectively.

    France-based Technip Energies has carried out a concept study and feed work on the entire Dorra gas field development programme.

    Progress has been hampered by a dispute over ownership of the Dorra gas field. Iran, which refers to the field as Arash, claims it partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development. Kuwait and Saudi Arabia maintain that the field lies entirely within their jointly administered Neutral Zone – also known as the Divided Zone – and that Iran has no legal basis for its claim.

    In February 2024, Kuwait and Saudi Arabia reiterated their claim to the Dorra field in a joint statement issued during an official meeting in Riyadh between Kuwaiti Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah and Saudi Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

    Since that show of strength and unity, projects to produce and process gas from the Dorra field have gained momentum.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16734353/main5834.jpg
    Indrajit Sen
  • Teams prepare bids for Riyadh East sewage treatment plant

    8 May 2026

     

    At least six consortiums are preparing to submit bids for Saudi Arabia's Riyadh East independent sewage treatment plant (ISTP) project, according to sources.

    The project will be developed under a build‑own‑operate‑transfer model with a 25‑year concession term.

    The plant will have a treatment capacity of 200,000 cubic metres a day (cm/d) in its first phase, expanding to 500,000 cm/d in the second phase.

    MEED understands that the following consortiums are in discussions to submit bids for the project, which has a recently extended bid submission deadline of 30 June:

    • Suez (France) / Civil Works Company (Saudi Arabia) / Alwael (Saudi Arabia)
    • Saur (France) / Samsung E&A (South Korea) / Al-Bawani (Saudi Arabia) / Nesma (Saudi Arabia)
    • Alkhorayef (Saudi Arabia) / GS Inima (Spain)
    • EtihadWE (UAE) / Metito (UAE)
    • Veolia (France) / AlJomaih Energy & Water (Saudi Arabia)
    • Miahona (Saudi Arabia) / Marafiq  (Saudi Arabia)

    In December 2025, a group comprising Metito, EtihadWE and SkyBridge was selected as the preferred bidder for the Hadda ISTP project. Miahona, Marafiq Company and Buhur for Investment was selected as the reserved bidder.

    That same month, the Miahona-led consortium was selected as preferred bidder for the Arana ISTP and the Metito-led consortium was selected as the reserved bidder. Both projects have yet to reach financial close.

    The Riyadh East, Hadda and Arana ISTPs are being undertaken by state water offtaker Sharakat, formerly Saudi Water Partnership Company, in collaboration with the National Centre for Privatisation & PPP.

    In 2024, Sharakat prequalified 53 companies that could bid for the Riyadh East ISTP, part of seven planned ISTP projects it said it would procure between 2024 and 2026. The request for proposals was issued last October. 

    WSP is the technical adviser and KPMG Middle East is the lead and financial adviser on the project.

    The targeted commercial operation date for the facility is 2029.

    ISTP plans

    According to Sharakat’s recent seven-year statement, it has identified six additional large ISTPs in the development pipeline.

    These are:

    • Kharj (75,000 cm/d)
    • Abu Arish (50,000 cm/d)
    • Hafar Al-Batin (100,000 cm/d)
    • Riyadh North (TBD)
    • Najran South (50,000 cm/d)
    • Khamis Mushait (50,000 cm/d)

    The company is also pursuing a nationwide small sewage treatment plant programme covering about 139 smaller ISTPs grouped into seven clusters.

    These are designed to add about 521,450 cm/d of additional treatment capacity across the kingdom.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16734156/main.jpg
    Mark Dowdall
  • Saudi Arabia tenders Jeddah-Mecca highway PPP

    8 May 2026

     

    Saudi Arabia’s Roads General Authority (RGA) and the National Centre for Privatisation & PPP (NCP) have tendered the contract for the development of the Jeddah-Mecca highway project.

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

    The scope of the tender is split into two sections: development of motor service areas (MSA) and highway services. 

    Under the MSA component, the company will develop, permit, finance, design, engineer, procure, construct, complete, test, commission, insure, operate and maintain three MSAs along the highway.

    The contract term is 25 years, including two years of the construction period.

    Each MSA plot will cover 34,500 square metres and will include facilities such as fuel stations, electric vehicle charging, truck services, tyre and oil change, car wash and repair, retail and food outlets, ATMs, restrooms, mosques, parking, landscaping and other associated utilities.

    The highway services component will include insurance, operation and maintenance of highway assets for 10 years.

    The 64-kilometre (km) Jeddah-Mecca highway has four lanes in each direction. The construction works on 51km are complete, while the rest is under construction and scheduled for completion in 2027.

    In March, the RGA and NCP prequalified three bidders to develop the project. These were:

    • Algihaz Holding / ICA Construction (local/Turkiye)
    • Lamar Holding / Shaanxi Construction Engineering Group Corporation (Bahrain/China)
    • Mada International Holding (local)

    The expression of interest notice for the project was first issued in October 2024, as MEED reported.

    The project is one of four planned highway schemes in the kingdom’s privatisation and public-private partnership (P&PPP) pipeline.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16731199/main.jpg
    Yasir Iqbal
  • US sanctions Iraq’s deputy oil minister

    8 May 2026

    The US has sanctioned Iraq’s Deputy Oil Minister Ali Maarij Al-Bahadly, in another blow for the country’s oil and gas sector.

    In a statement released by the US Treasury, it said that he “abuses his position to facilitate the diversion of oil to be sold for the benefit of the Iranian regime and its proxy militias in Iraq”.

    The US Department of the Treasury’s Office of Foreign Assets Control (Ofac) has also designated three senior leaders of the militias Kata’ib Sayyid Al-Shuhada and Asa’ib Ahl Al-Haq. 

    In its statement, it said that the US will continue to hold these groups and other militias in Iraq, such as Kata’ib Hizballah, accountable for their attacks against US personnel and civilians, diplomatic facilities and businesses across Iraq.

    Secretary of the Treasury, Scott Bessent, said: “Like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people.”

    He added: “Treasury will not stand idly by as Iran's military exploits Iraqi oil to fund terrorism against the United States and our partners.”

    Ofac said that it designated Iraq’s deputy minister of oil on 7 May because he had been “instrumental in facilitating the diversion of Iraqi oil products to benefit known Iran-affiliated oil smuggler Salim Ahmed Said, as well as Iran-backed terrorist militia Asa’ib Ahl Al-Haq (AAH)”.

    It added: “For years, Maarij has used his official positions, first as the head of the Iraqi parliament’s oil and gas committee, and then within the Iraq Ministry of Oil, to enrich Said, AAH, and by extension, Iran.”

    The US Treasury said that it designated Said in June 2025 for running a network of companies selling Iranian oil falsely declared as Iraqi oil to avoid sanctions.

    In its statement, it said: “Integral to this operation was Said’s ability to obtain favoured access to Iraqi oil and procure forged documentation from Iraqi government officials, legitimising illicit oil.

    “To that end, Said was responsible for bribing complicit officials in the Iraqi government, as well as reportedly installing Maarij in his official position.”

    Since 2018, Maarij has held several positions in Iraq’s Oil Ministry, including head of the licensing and contracts office, deputy minister, and acting oil minister. 

    The US Treasury said that, in his official capacities, Maarij enabled Said to illicitly procure oil products by granting exportation rights to Said’s companies. 

    It claimed that Maarij authorised trucking several million dollars’ worth of oil a day from the Qayarah oil field to VS Oil Terminal in Khor Zubayr for export.

    The US sanctioned VS Oil Terminal in July last year.

    The US Treasury said that VS Oil oversaw the mixing of Iranian oil with Iraqi oil before being shipped to market. 

    It also said that Maarij is also responsible for falsifying documentation on the provenance of oil for Said’s network, enabling it to be smuggled to market disguised as purely Iraqi oil.

    Neither Iraq nor Iran has responded to the announcement of the new sanctions.

    The sanctions were announced as the US and Iran battle over control of the Strait of Hormuz, which has seen significant disruption to shipping since the US and Israel started their war with Iran on 28 February 2026.

    Iraq’s oil and gas sector is currently going through a crisis due to the disruption to shipping through the Strait of Hormuz, which has caused the country’s oil exports to collapse.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16729987/main.png
    Wil Crisp
  • Sabic registers profit in first quarter of 2026

    8 May 2026

    Saudi Basic Industries Corporation (Sabic) returned to profit in the first quarter of 2026, posting a net income of SR13.2m ($3.52m) compared to a SR1.21bn loss a year earlier. 

    The Saudi petrochemicals ​giant posted adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of SR4.15bn for the three months to 31 March, up 25% from the previous quarter.

    The company’s revenue fell 6% quarter-on-quarter to SR26.15bn ($6.97m).

    Adjusted net income was recorded in at SR816m, compared to a loss in the previous quarter, while adjusted earnings per share stood at SR0.27.

    Adjusted earnings before interest and taxes rose to SR1.45bn, an increase of SR1.01bn from the prior quarter.

    Sabic said its net position shifted to a debt of SR2.77bn at the end of March, from a net cash position of SR3.61bn at the end of 2025.

    “Our transformation journey continues to deliver performance improvements that unlock greater value for our shareholders. We realised $220m at the Ebitda level on a recurring basis during the first quarter of 2026, in line with our planned improvement rate. This keeps us on track towards our cumulative 2030 annual target of $3bn, consisting of $1.4bn in cost excellence and $1.6bn in value creation,” Sabic CEO Faisal Alfaqeer said.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16719476/main1840.jpg
    Indrajit Sen