Fitch raises Jordan's 2025 growth forecast amid strong Q1 performance
Fitch's forecast follows data from the Department of Statistics, showing a 2.7 per cent year-on-year expansion in Q1 2025, driven primarily by a rebound in the manufacturing sector.
According to the report, manufacturing, accounting for 17.7 per cent of GDP, grew by 5.1 per cent in real terms, marking its strongest quarterly performance since early 2008. On a seasonally adjusted basis, the economy grew 0.7 per cent quarter-on-quarter, maintaining the momentum observed since Q1 2024.
The report warned that the remainder of 2025 is expected to bring challenges. 'Economic activity will slow from Q2 onwards as the impacts of US protectionism begin to weigh on domestic industries.'
US tariffs loom over H2
The downturn is expected to be driven by new US tariffs, set to take effect on August 1, under a trade policy announced by President Donald Trump. These tariffs, anticipated to range between 10 per cent and 20 per cent, will apply to goods exported from Jordan, potentially undermining the country's key export sectors including textiles, jewelry, and fertilizers.
'Despite longstanding economic cooperation between the US and Jordan, there is little to suggest that the Kingdom has made progress on a revised trade agreement with the US. As such, our current view is that tariffs on goods exported by Jordan will increase to somewhere between 10-20 per cent on August 1. Given the importance of the US market to Jordan's economy, we still expect this to have a significant impact on Jordan's near-term growth outlook. Indeed, even with just the 10% baseline tariff applied, Jordan's trade deficit widened considerably JD1, 143.3 million in April, the widest recorded deficit.
With labour intensive sectors such as manufacturing (textiles, jewellery, and fertilisers) expected to experience a demand shock in H2, the report projects that unemployment will tick up from 21.3 per cent at end-2024 to 22.9 per cent by end-2025. 'This will exert some downward pressure on consumer spending, offsetting the impact of low inflation, price growth came in at just 2.0 per cent y-o-y in May - and monetary easing on disposable incomes. Indeed, we expect inflation to average just 1.6 per cent in 2025, thanks to muted global energy prices.'
Fitch expects the Central Bank of Jordan to follow the US Federal Reserve in easing rates, projecting a 50-basis-point cut to 6.00 per cent by the end of 2025.
Brighter outlook for 2026
Looking ahead, Fitch projects that real GDP growth will accelerate to 2.8 per cent in 2026 as US tariffs fade and regional trade opportunities improve. A modest recovery in export volumes is expected, particularly as US buyers shift toward lower-tariff sources and regional markets such as Iraq and Syria reopen.
Improved investor confidence could drive an uptick in fixed capital formation, and slightly lower unemployment (to 22.3 per cent) combined with lower global energy prices could provide a boost to household consumption, according to the report.
© Copyright The Jordan Times. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
an hour ago
- Gulf Today
Wall Street, dollar firm ahead of a big week for market risk
Wall Street and the dollar firmed on Friday as investors girded themselves for the week ahead, which includes a Federal Reserve policy meeting, crucial corporate results and US President Donald Trump's August 1 deadline for negotiating trade deals. 'Some deals will be done and talks will continue, and Trump may push out the deadline further,' said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. 'Trump's process is to shock and then be reasonable in terms of tariffs.' All three indexes were modestly green in early trading, and were on course for weekly gains. Gold lost some shine, pressured by the dollar as healthy risk appetites lured investors away from the safe-haven metal. With Trump's negotiating deadline just a week away, the US and its trading partners are scrambling to reach trade agreements, with European negotiators heartened by the deal with Japan announced on Tuesday. Intel's shares INTC.O dropped 8.8% after the chipmaker forecast steeper-than-expected quarterly losses and said it had halted or scrapped new factory projects in the US and Europe. More than a third of the companies in the S&P 500 have posted results, 80% of which have beaten estimates, according to LSEG data. Analysts now expect year-on-year second-quarter earnings growth of 7.7%, compared with the 5.8% estimate as of July 1. Four members of the Magnificent 7 group of Artificial Intelligence-related megacap stocks - Amazon, Apple , Meta and Microsoft are on next week's earnings docket, and market participants will scrutinize the companies' conference calls for signs that AI expenditures are beginning to pay off and whether tariff-related uncertainties continue to weigh on forward guidance. US economic data released on Friday showed an unexpected decline in new orders for core capital goods, as companies hold back on big ticket purchases amid the fog of ongoing trade talks. The Fed is expected to convene next week for its two-day monetary policy meeting, which is expected to culminate in a decision to let its federal funds target rate stand in the 4.25% to 4.50% range. The meeting comes at a moment in which Fed Chair Jerome Powell is facing criticism from Trump for not cutting rates. 'I don't expect Powell to change what he does, nor should he,' Ghriskey added. 'The idea of lower interest rates should scare us because Fed has had this huge job of bringing down inflation, and to ease rates at this point is clearly going to be inflationary.' The Dow Jones Industrial Average rose 113.54 points, or 0.25%, to 44,806.30, the S&P 500 rose 16.19 points, or 0.26%, to 6,379.67 and the Nasdaq Composite rose 44.40 points, or 0.21%, to 21,102.36. European shares gave back some of the previous session's gains as market participants parsed mixed corporate earnings and awaited developments in the U.S.-EU trade negotiations. MSCI's gauge of stocks across the globe fell 1.01 points, or 0.11%, to 940.34. The pan-European STOXX 600 index fell 0.29%, while Europe's broad FTSEurofirst 300 index fell 5.34 points, or 0.24%. Emerging market stocks fell 10.36 points, or 0.82%, to 1,256.93. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.95%, to 661.07, while Japan's Nikkei fell 370.11 points, or 0.88%, to 41,456.23. US Treasury yields drifted higher in a subdued trading as investors braced for a data-heavy week, updates on US trade talks, and a Federal Reserve policy meeting. The yield on benchmark US 10-year notes rose 0.2 basis points to 4.41%, from 4.408% late on Thursday. The 30-year bond yield rose 0.5 basis points to 4.9543% from 4.949% late on Thursday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 0.6 basis points to 3.919%, from 3.925% late on Thursday. The dollar gained strength but remained on course for its biggest drop in a month as investors focused on tariff negotiations and central bank meetings on the calendar for next week. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.28% to 97.72, with the euro down 0.2% at $1.173. Against the Japanese yen, the dollar strengthened 0.4% to 147.57. In cryptocurrencies, bitcoin fell 3.08% to $115,133.22. Ethereum declined 2.63% to $3,641.43. Oil prices softened as investors mulled the global demand outlook and a potential supply increase from Venezuela. US crude fell 0.56% to $65.63 a barrel and Brent fell to $68.91 per barrel, down 0.39% on the day. Gold prices dropped in opposition to the firming dollar, amid growing optimism surrounding U.S.-EU trade talks. Spot gold fell 0.93% to $3,336.52 an ounce. US gold futures fell 0.85% to $3,342.50 an ounce. Canada's main stock index edged higher on Friday, led by technology shares, even as US President Donald Trump suggested the United States may not reach a negotiated trade deal with Canada. The benchmark S&P/TSX Composite Index rose 0.2% to 27,427.78 points, remaining on track for a modest weekly gain. Trump said on Friday that the United States may not reach a trade agreement with Canada, hinting his administration could set a tariff rate unilaterally. Agencies
Khaleej Times
5 hours ago
- Khaleej Times
Etihad Airways open to recruiting Wizz Air Abu Dhabi employees, says CEO
Etihad Airways is open to hiring employees of Wizz Air Abu Dhabi, which announced suspending UAE operations from September 1 and end the joint venture, said a senior official. 'We're totally open (to hire Wizz Air Abu Dhabi employees). We need people. I'm sure that other airlines are also going to try it (to hire Wizz Air Abu Dhabi staff). This is business as usual,' Antonoaldo Neves, CEO of Etihad Airways, told Khaleej Times in an interview. 'We are hiring a lot. We're open to receiving any airline's resume. We recruit globally,' he said. Around 450 Wizz Air Abu Dhabi employees are in limbo due to the suspension of operations, Bloomberg reported earlier. Wizz Air CEO Jozsef Varadi offered Abu Dhabi employees the opportunity to take another job across the budget carrier's European network. But many employees will find it difficult to migrate to Europe, it reported. The Abu Dhabi-based national carrier has been aggressively expanding its operations, recently announcing seven new routes in July, including Almaty, Kazakhstan; Baku, Azerbaijan; Bucharest, Romania; Medina, Saudi Arabia; Tbilisi, Georgia; Tashkent, Uzbekistan; and Yerevan, Armenia. It has launched or announced 27 new routes in a single year as part of its ambitious growth strategy. 2,500 employees in 2025 Neves was speaking after Etihad Airways took delivery of its first Airbus A321LR (long range) at the Airbus Finkenwerder site in Germany. It will receive these 30 new long-range aircraft over the next few years. According to the Etihad chief, the airline will receive 22 aircraft this year, taking the total size of the fleet to around 200-220 over the next five years. 'This year, we're recruiting 2,500 people. We need to recruit from across the globe. We're going to hire about 350 pilots per year over the next five years and about 1,500 flight attendants every year. We're going to get to about 17,000-18,000 people,' he said. It hired more than 2,000 new employees and promoted more than 1,500, primarily pilots and cabin crew, last year. The fast-growing airline currently employs around 12,000 staff across various divisions. The UAE airlines have been on a hiring spree in the post-pandemic period. Emirates Group, the parent company of Emirates airline, last week announced 17,300 openings in the current financial year.
Khaleej Times
6 hours ago
- Khaleej Times
Final countdown: Last chance to make July unforgettable with Big Ticket
There's a first time for everything. First job. First trip. First car. But what if this July marked your first million? Big Ticket is closing out July with its biggest prizes yet, and this is your final chance to take part in a promotion that's already brought smiles to so many faces all month long. Whether you're in it for the dream lifestyle, the cash rewards, or the cars, there's still time to step into something unforgettable. At the heart of it all is the Dh20 million grand prize, set to be announced during the live draw on August 3 in Abu Dhabi. But that night won't just crown one winner, six more participants will walk away with Dh50,000 each, making it a celebration of multiple firsts. And while the grand reveal is just around the corner, the winning hasn't stopped yet. Big Ticket's weekly e-draws have already named twelve winners, each walking away with Dh50,000, but there's one final weekly draw to go. This week, another four names will be drawn, and they could include yours. To those feeling extra lucky, participants who purchased two or more cash tickets in a single transaction between 1–24 July are already entered into the Big Win Contest, an exclusive experience where four finalists will be invited to attend the grand draw in person. Each of them is guaranteed to win between Dh20,000 and Dh150,000, and the finalists will be announced on August 1. Luxury car fans haven't been forgotten either. This month's Dream Car draw features a Range Rover Velar, with the winner to be revealed on 3rd August. And coming right after: a BMW M440i draw on September 3. To make the final days of July even more rewarding, Big Ticket is running bundle promotions at all ticket counters and online: Buy 2, get 1 free (online only) Buy 2, get 2 free (Big Ticket) and Buy 2, get 3 free (Dream Car) at Zayed International Airport and Al Ain Airport counters. With only days to go, July is still packed with possibility. It could be the summer you'll always remember as the one where you took a leap and saw your name on the winner's list. Tickets are available online at or at counters located in Zayed International Airport and Al Ain Airport. For all the latest news and updates on upcoming draws, everyone is encouraged to follow Big Ticket's social media platforms. The weekly E-draw dates:
