Amman: Economic stakeholders are advocating for robust policy measures to strengthen Jordan's domestic industrial capacity and enhance export competitiveness as the kingdom contends with a persistent trade deficit.
According to Jordan News Agency, industry leaders and economic analysts emphasized the imperative of implementing comprehensive fiscal incentives for high-value-added exporters, reducing operational overheads, and aggressively pursuing new international trade partnerships to mitigate the structural trade imbalance.
Experts called for targeted investment stimulus packages to catalyze domestic production capacity that could substitute imports, while simultaneously implementing strategic import controls on non-essential commodities and strengthening regional logistics infrastructure to enhance trade facilitation.
Official economic indicators reveal that Jordan's trade deficit-the differential between import expenditure and export revenue-expanded by 3.2 percent year-on-year in 2024, reaching JD9.677 billion ($13.65 billion) compared to JD9.376 billion in the previous fiscal year. Despite domestic exports posting 4.1 percent growth to JD8.579 billion and total exports (including re-exports) climbing 5.8 percent to JD9.433 billion, these gains were insufficient to offset the 4.5 percent surge in imports, which totaled JD19.110 billion, up from JD18.288 billion in 2023.
Mousa al-Saket, board member of the Amman Chamber of Industry, noted that the widening trade gap stems from asymmetric growth rates, with imports outpacing export expansion. "The export-to-import coverage ratio has deteriorated from 49 percent to approximately 45 percent by year-end, indicating that export growth remains insufficient to counterbalance the import surge," al-Saket explained. He attributed the deficit expansion to sectoral export performance disparities, noting that while apparel and pharmaceutical exports demonstrated robust growth, traditional export sectors including fertilizers, phosphates, and jewelry experienced significant contraction, resulting in subdued overall export momentum.
Al-Saket advocated for an integrated policy framework that simultaneously stimulates export growth while curtailing import dependency. The proposed measures include incentivizing value-added manufacturing to reduce raw material exports in favor of processed goods, implementing preferential tax treatment for high-value exporters, and diversifying export market concentration.
Economic analyst Noah Al-Sheyab highlighted Jordan's entrenched trade deficit, noting that despite commendable export performance, the kingdom's imports consistently outstrip exports by a substantial margin. "Department of Statistics data indicates that despite national exports growing by 4.1 percent and total exports by 5.8 percent, these gains were overshadowed by a 4.5 percent import escalation to JD19.110 billion, widening the trade deficit by 3.2 percent," Al-Sheyab observed. He pointed out that the current export-to-import coverage ratio of below 49 percent underscores the profound structural imbalance in Jordan's trade position, emphasizing that exports would need to double to achieve trade equilibrium.
Dr. Raad Al-Tal, Professor of Economics at the University of Jordan, attributed the trade deficit expansion to elevated global energy and food commodity prices, robust domestic demand for imported goods, and constrained exports due to slowing growth in target markets and rising production and logistics costs. "Geopolitical tensions and global supply chain disruptions have adversely impacted trade flows, while declining foreign direct investment has weakened productive capacity and export potential," Al-Tal explained.
Dr. Qasim Al-Hamouri, Professor of Economics at Yarmouk University, attributed the trade deficit expansion primarily to regional instability, particularly the Israeli offensive on Gaza, which has severely disrupted trade flows. "Weakening global demand for Jordanian products, coupled with escalating shipping costs and marine insurance premiums, has constrained export volumes, while imports predominantly food commodities and production inputs have not decreased proportionately, exacerbating the deficit," Al-Hamouri explained.
Economic researcher Ahmad Al-Majali observed that despite notable export growth, Jordan's persistent reliance on imports, particularly raw materials, fuel, and consumer goods, continues to drive the trade imbalance. "Fuel imports exceeding JD2.6 billion represent one of the highest import expenditure categories, followed by intermediate goods and capital equipment for production processes," Al-Majali noted. He added that increased domestic demand for both durable and non-durable consumer goods has elevated import values without corresponding export growth in these categories.