When discussing the Jordanian economy, attention often focuses on limited natural resources, the trade deficit, and the country’s reliance on imports. A closer look at developments in the external sector over recent years, however, reveals the early signs of an important transformation. Although gradual, Jordan has begun reshaping the structure of its exports, moving from dependence on a limited number of traditional commodities toward a more diversified and competitive production and export base.

 

This transformation does not imply that Jordan has overcome all of its economic challenges. Rather, it reflects the economy’s growing ability to adapt to global economic changes and demonstrates that building a more open economy depends not only on increasing export volumes, but also on diversifying exports and raising their value added, thereby strengthening the economy’s resilience to external shocks.

 

For many years, Jordanian exports were closely associated with phosphate, potash, and fertilizers. These sectors have long been major sources of foreign exchange earnings and have played an important role in supporting the country’s trade balance. At the same time, this concentration exposed export performance to fluctuations in international commodity prices, with declines in global prices directly affecting export revenues.

 

In recent years, however, the picture has begun to change. According to recent data, exports increased from 20.2 percent of GDP in 2021 to 26.2 percent in 2022 before stabilizing at 24.9 percent in 2024, despite ongoing geopolitical tensions and disruptions in global trade. This performance reflects the ability of Jordan’s export sector to maintain its momentum in a challenging international environment, supported by the expansion of industrial exports and access to new markets.

 

At the same time, the composition of exports has gradually shifted toward higher value-added products. Non-traditional exports increased from 2.2 percent of GDP in 2016 to 5.2 percent in 2022 before settling at 2.7 percent in 2024. Meanwhile, traditional exports, led by phosphate and potash, continued to account for 15.8 percent of GDP. These figures suggest that Jordan has not abandoned its traditional export strengths but has instead succeeded in building a broader and more diversified export base that is less dependent on a single commodity or sector.

 

This transformation is particularly evident in the expansion of manufacturing exports. Pharmaceuticals, chemicals, food products, engineering products, and garments now account for an increasing share of Jordan’s exports. These industries generate higher export earnings while creating skilled employment opportunities, encouraging investment in technology and innovation, and strengthening the integration of the domestic economy into global value chains.

 

From an economic perspective, a more diversified export base enhances an economy’s ability to withstand external shocks, whether arising from commodity price fluctuations, shifts in global demand, or geopolitical instability. Export diversification therefore represents far more than a commercial achievement; it is a fundamental pillar of long-term economic stability.

 

One of the key drivers behind this gradual but significant transformation has been Jordan’s effective use of its extensive network of free trade agreements with the United States, the European Union, Arab countries, and other international partners. These agreements have provided Jordanian products with preferential access to markets comprising hundreds of millions of consumers, creating significant opportunities for export expansion.

 

The figures clearly illustrate the scale of this transformation. Jordan’s exports to Arab countries increased from US$123.5 million before the Greater Arab Free Trade Area entered into force to approximately US$5.03 billion in 2024. Exports to the United States rose from US$232 million before the bilateral free trade agreement to more than US$3.11 billion, while exports to the European Union increased from US$63 million to approximately US$689 million over the same period. These figures demonstrate that trade agreements have evolved beyond legal frameworks into effective instruments for expanding market access for Jordanian products.

 

The importance of these agreements lies in the competitive advantages they provide through tariff exemptions and trade facilitation measures. However, maximizing their benefits requires more than simply having agreements in place. It depends on improving product quality, raising productivity, complying with international standards, and investing in innovation and advanced technologies.

 

Another positive development has been the diversification of export destinations. Rather than relying on only a few markets, Jordanian exports are now distributed across Arab, European, American, and Asian markets. This geographical diversification reduces the risks associated with political or economic crises affecting individual markets and provides Jordanian exporters with greater flexibility to sustain export growth.

 

Such diversification has become increasingly important amid growing uncertainty in the global economy. Flexible and diversified export markets are now essential for maintaining stable external revenues and supporting sustainable economic growth.

 

The improvement in exports has also contributed to broader macroeconomic stability. Jordan’s current account deficit stood at 5.9 percent of GDP in 2024, while the cyclically adjusted deficit reached 4.3 percent, close to the International Monetary Fund’s estimated equilibrium benchmark of around 4 percent. Consequently, the IMF concluded that Jordan’s external position is broadly consistent with economic fundamentals, reflecting the increasingly important role that exports play in strengthening the country’s external stability.

 

Jordan’s experience over recent years demonstrates that building a strong export sector is not simply about increasing export volumes. It requires diversifying products and markets while moving toward higher value-added production. If current policies continue and investment in manufacturing, innovation, and technology is sustained, non-traditional exports could become the primary engine of external sector growth, supporting stronger economic expansion, creating quality employment opportunities, and enhancing Jordan’s competitiveness in global markets.