S&P Affirms Jordan at BB Minus With Stable Outlook as Aqaba Trade Volumes Rise 16 Percent
S&P Global Ratings affirmed Jordan’s long and short term foreign and local currency sovereign credit ratings at BB-/B on August 28, 2026, keeping the outlook stable. The agency said trade rerouting through the Red Sea port of Aqaba, where cargo volumes have risen 16 percent year on year in 2026, along with resilient remittance inflows and continued bilateral and multilateral support, are offsetting Jordan’s exposure to regional conflict, even as it projects the country’s net general government debt will climb to just above 77 percent of gross domestic product this year, among the higher debt loads of any similarly rated sovereign.
The transfer and convertibility assessment, a separate measure of the risk that currency controls could block debt service, was kept at BB+.
The Rating Action and What Sits Behind It
The rating action followed a committee process in which Jordan scored an indicative rating of B+ before a one notch supplemental adjustment lifted the final foreign and local currency rating to BB-. The rating agency said the uplift reflects its expectation that further donor support, particularly from the United States and Gulf Cooperation Council states, would be forthcoming if needed. It said it does not see default risk applying differently to foreign currency and local currency debt, so both ratings sit at the same level.
Across S&P’s five rating factors, scored on a scale of 1, strongest, to 6, weakest, Jordan’s institutional and monetary assessments each scored 4, while its economic and external assessments each scored 5. Within the fiscal factor, fiscal flexibility and performance scored 3, while the debt burden assessment scored 6, the weakest score.
Trade Rerouting and External Support Cushion the Economy
The report said cargo volumes at Aqaba have risen 16 percent year on year in 2026 as neighboring countries increasingly route trade through the port to circumvent major bottlenecks in the Strait of Hormuz. Tourism, at close to 15 percent of GDP, and remittances, at roughly 4 billion dollars or 6 percent of GDP a year, have also held up: remittances rose 14.3 percent in the first half of 2026, though the agency noted this partly reflects Jordanians abroad repatriating savings rather than new inflows. Tourist arrivals reached a record in July, above pre war levels, even as tourism receipts fell 5.3 percent to 3.5 billion dollars in the first half of the year on lower visitor spending.
External support remains central to the rating. The agency said foreign assistance typically equals about 12 percent of GDP, and it expects United States support of 2.10 billion dollars in 2026, including about 845 million dollars in budget support grants, under a memorandum of understanding covering 2023 through 2029. That compares with 1.65 billion dollars in 2025, an increase of 27.3 percent on our calculation. Jordan has also maintained its International Monetary Fund Extended Fund Facility program through a fifth review in June 2026, and the government expects close to 4 billion dollars in total external support this year.
Manufacturing, at approximately 17 percent of GDP, has become a growth driver in its own right, which the agency linked partly to Jordanian exporters supplying reconstruction and rebuilding needs in Syria. The agency still flagged Jordan’s regional exposure as elevated: close to 24 percent of exports go to the Middle East, 12 percent of imports come from the region, and more than half of tourist arrivals and remittances originate there.
Debt, Deficits and a Labor Market Under Strain
S&P revised its 2026 consolidated government deficit forecast to 2.2 percent of GDP, up from a previous forecast of 1.6 percent, citing higher security related spending and slower revenue growth. The agency said this consolidated figure incorporates a central government deficit of 5.1 percent of GDP offset by a 3.3 percent of GDP surplus at Jordan’s Social Security Corporation. It expects the deficit to narrow to 0.3 percent of GDP by 2029, a projected improvement of 1.9 percentage points over three years on our calculation. Net general government debt, at 71.1 percent of GDP in 2020, is forecast to rise from 76.1 percent in 2025 to a peak of 77.2 percent in 2026, an increase of 6.1 percentage points since 2020 on our calculation, before easing to 74.1 percent by 2029.
Losses at state owned enterprises remain a drag on the fiscal accounts. The agency estimated combined losses at National Electric Power Co. and the Water Authority of Jordan will persist, with NEPCO’s losses alone rising to about 470 million dinars in 2026 from 350 million dinars in 2025, an increase of 34.3 percent on our calculation, largely tied to an expensive power purchase agreement at the Attarat oil shale plant signed in 2014.
The current account deficit is forecast to widen to 7.2 percent of GDP in 2026 from 4.8 percent in 2025, a widening of 2.4 percentage points on our calculation, before narrowing toward 5.0 percent by 2029. Gross foreign reserves are projected at approximately 26 billion dollars by year end 2026, equivalent to 7.7 months of current account payments, but the agency’s narrower measure of usable reserves, which strips out the monetary base and other reserves not readily available for debt service, is projected to reach 10.5 billion dollars by year end 2026, or roughly 40 percent of the gross headline figure on our calculation. Usable reserves are projected to fall further to 7.1 billion dollars by 2029 as gold prices ease from an assumed 4,500 dollars an ounce in 2026 to 3,300 dollars by 2028; gold made up about 16 percent of Jordan’s gross reserves at the end of 2025.
Unemployment stood at 21.2 percent at the end of 2025 and is expected to hold near that level in 2026. The agency’s underlying data showed sharp disparities: youth unemployment reached approximately 39 percent in 2026, about 1.8 times the headline rate on our calculation, and female unemployment reached approximately 33 percent, about 1.6 times the headline rate on our calculation. Inflation, by contrast, has stayed contained, averaging an expected 2.4 percent through 2029 after peaking at 2.8 percent in May 2026.
| Indicator | 2025 | 2026 forecast | 2029 forecast |
|---|---|---|---|
| Real GDP growth | 2.8% | 2.5% | 3.2% |
| Current account balance (% of GDP) | -4.8% | -7.2% | -5.0% |
| Net government debt (% of GDP) | 76.1% | 77.2% | 74.1% |
| Unemployment rate | 21.2% | 21.2% | 19.5% |
Table: Selected Indicators from the rating action report, published August 28, 2026. The agency said it expects growth to rebound to an average of 3.2 percent a year over 2027 through 2029, in line with the 2029 figure shown here.
Why it matters:
For Jordan, the affirmation avoids an additional ratings driven increase in the country’s financing costs, though its actual borrowing costs will keep moving with global interest rates, regional risk conditions, and its own fiscal and external position. That distinction matters most for the external financing Jordan depends on heavily: the agency estimates about 75 percent of the government’s 2027 external financing needs will come from IMF support, grants, concessional loans and project financing from bilateral partners, limiting how much the government needs to borrow commercially. A downgrade would have tightened that access at a time when net debt is already near 77 percent of GDP and interest payments are forecast to consume close to 13 percent of government revenue in 2026. The rating also matters for the reform program itself: the agency tied Jordan’s resilience directly to structural changes already under way, including a widened domestic tax base, gradual digitalization of tax administration and procurement, and restructuring plans at loss making state enterprises, and a downgrade risks discouraging that trajectory by raising financing costs just as the government tries to bring the deficit down. For ordinary Jordanians, the unemployment data embedded in the rating report, particularly unemployment near 39 percent among youth, points to a labor market strain that the rating action itself does not resolve even where the sovereign’s finances hold up.
Outlook:
The agency said the stable outlook reflects a balance, over the next twelve months, between Jordan’s resilient economic performance following fiscal and economic reforms and higher international reserves, against elevated regional security risks, still high public debt and elevated current account deficits. It said it could lower the ratings if regional security conditions deteriorated with an adverse impact on growth, fiscal performance or the balance of payments, or if bilateral and multilateral donor support diminished. It said it could raise the ratings if regional security conditions improved and tourism, remittances and capital flows all strengthened, if Jordan’s external position strengthened through sustained growth in international reserves, or if net general government debt fell faster than currently projected without undermining growth.
Sources: S&P Global Ratings, “Jordan ‘BB-/B’ Ratings Affirmed; Outlook Stable,” rating action report published August 28, 2026, spglobal.com/ratings.
