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Jordan’s economic growth to slow on lower tourist arrivals

The Temple of Hercules in Jordan. Tourism contributed about 15% to GDP in 2023
The Temple of Hercules in Jordan. Tourism contributed about 15% to GDP in 2023

Jordan’s economic growth will ease to 2.1 percent in 2024 from 2.6 percent in 2023, as tourism arrivals are likely to be lower than record-breaking levels seen last year, S&P Global Ratings said in a report.

“Our GDP growth forecast reflects fiscal drag and an expected increase in precautionary savings amid rising regional tensions,” it said.

However, growth will bounce back toward three percent by 2027 as regional tensions eventually ease.

“We expect Jordan’s structural reform efforts – aimed at improving competitiveness and fostering investment – should eventually start to pay off; several exploratory mining projects for fertiliser-related compounds are in the pipeline, and the UAE signed a $2 billion investment pledge with Jordan in October 2023.”

However, S&P affirmed Jordan’s ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings, keeping the outlook stable as it expects that the war between Israel and Hamas will not escalate beyond Gaza.

“We think Jordan will effectively leverage international support and has adequate domestic policy buffers to manage the conflict’s impact on tourism and the broader economy,” the report said.

Tourism contributed about 15 percent to GDP in 2023. In the near term, the report expects American and European tourist arrivals to decline the most. On the other hand, Arab tourist arrivals, including Jordanians living abroad, should continue to prove resilient to regional tensions.

The rating agency expects international financial support for Jordan to remain strong. Given its key location, the US and the GCC see maintaining Jordan’s stability as an important foreign policy objective.

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