Stable dinar, steady supply chains keep Jordan’s inflation moderate, experts say

Jordan’s relatively low inflation rate results from stable exchange rates, consistent supply chains, and government policies that cushion the impact of rising energy and shipping costs, economic analysts told Al-Ghad.

Factors Behind Moderate Inflation

Experts pointed to the stability of the Jordanian dinar against the US dollar, the steady flow of basic goods, and official measures that absorb part of global price increases as key reasons for the country’s contained price pressures. They emphasised the need to cut transport, energy and production costs, improve supply chain efficiency, boost local output, and diversify import sources to sustain price stability, support growth, and protect household incomes.

Economist Mohammad Al-Hadab Al-Sarhan said Jordan’s capacity to hold inflation at 2.26 percent during the first nine months of 2026 shows the national economy can absorb much of the price shock despite regional turmoil and volatile global energy and shipping markets. He noted that moderate inflation limits the erosion of purchasing power, helps households and businesses plan financially, and creates a stable environment for investment and production.

Al-Sarhan described the combination of moderate inflation and 3 percent economic growth in the second quarter of this year as a positive sign that activity continues without widespread price pressures. He attributed the low inflation to monetary stability maintained by the Central Bank of Jordan, the dinar’s fixed exchange rate against the dollar, and strong foreign exchange reserves that shield the economy from external shocks. Lower prices for vegetables, fruits and dairy products in September also helped ease pressures, he said.

However, Al-Sarhan warned that Jordan remains vulnerable to swings in global energy and food prices and international transport costs because it imports a large share of its needs. He stressed that moderate inflation does not mean falling prices, only slower increases, and that real benefits depend on wage and income growth. The greatest economic gain occurs when productivity and incomes rise faster than living costs, he added.

Policy Recommendations and Structural Measures

Al-Sarhan called for moving beyond simply containing inflation to addressing the root causes of high living and production costs. He urged faster development of public transport linking residential areas with job centres, improved logistics and supply chain efficiency to cut the cost of moving people and goods, and encouraging residential investment in areas with rising rents. He also recommended better wholesale markets, storage and distribution to reduce waste and food price fluctuations, alongside diversifying import sources and strengthening domestic production in sectors where Jordan has competitive advantages. These steps align with the Economic Modernisation Vision and offer more sustainable solutions than temporary price controls, he said.

Al-Sarhan concluded that moderate inflation is a strength of the Jordanian economy, but the annual rate rising to 2.73 percent in September requires continued monitoring, especially in transport and rents. Success in the next phase should be measured by the economy’s ability to keep prices stable while accelerating growth and raising productivity and incomes, he said.

Economic expert Hossam Ayesh said Jordan’s ability to keep inflation moderate despite regional unrest and higher energy, shipping and supply-chain costs reflects a mix of policies that limit the transmission of external pressures. He credited the regular flow of supply chains, availability of goods, household spending restraint, the growing use of electric vehicles that moderates petroleum demand, and government measures that absorbed about JD255 million in energy and petroleum costs. Moderate inflation helps preserve household purchasing power, sustain commercial activity, and provide a stable environment for businesses, investors and tourists, Ayesh said.

On monetary policy, Ayesh said the Central Bank of Jordan’s prudent policies balance stability with growth. Maintaining this course requires continued fiscal, monetary and livelihood policies that limit price pressures, along with integrated economic options including interest rates and tax measures that support higher growth, he added.

Economic expert Munir Diah said Jordan’s ability to hold inflation at 2.26 percent during the first nine months of the year, despite geopolitical challenges and rising global energy prices, shipping costs and maritime insurance, reflects the economy’s resilience. He attributed this to policies adopted by successive governments, learning from past crises, which helped maintain market stability, ensure basic commodity availability, and limit inflationary pressures. Diversifying energy sources, expanding renewable energy, using natural gas, and supporting domestic industrial and agricultural production strengthened the economy’s ability to withstand external fluctuations, he said.

Diah noted that maintaining safe strategic reserves of wheat, barley, grains and food products, diversifying import sources, and keeping land, sea and air crossings operational during crises helped ensure goods availability and reduce the risk of shortages or sharp price increases. Measures to mitigate higher shipping costs, support basic commodities, and absorb part of fuel price differences also limited the transmission of global price increases, he said. The Central Bank’s monetary policy, maintaining the dinar’s exchange rate against the dollar and managing interest rates in line with global developments, strengthened monetary stability and limited imported inflation, Diah added.

He stressed that comfortable foreign currency reserves and the ability to secure the Kingdom’s basic commodity needs for extended periods strengthen the economy’s capacity to continue supplying the domestic market and support price stability amid ongoing regional and international challenges.