Price Sensitivity
Jordanian private and public sector consumers of goods and services are often price sensitive. When applicable, U.S. companies are encouraged to make use of export and development financing tools to make offers more attractive. Those participating in competitive government tenders will find that price is a particularly important consideration when national funds (versus donor assistance funds) finance a procurement.
Domestic Market Size & Purchasing Power
Jordan is considered a lower-middle income country, with a per capita GDP of $4,204. In comparison to other regional markets, Jordan’s domestic market is small, with a population of 11.4 million. The population growth rate continues to climb, and over 53 percent of the population is under the age of 24 years old. Approximately 50 percent of individuals between the ages of 15-24 are unemployed. U.S. companies pursuing opportunities in Jordan are encouraged to consider a regional strategy to capture greater market share.
Regional Instability
Jordan has been very resilient in a region that has dealt with significant instability in recent years. Regional strife has adversely impacted the country’s ability to trade with its neighbors. In 2015, Jordan’s main border crossings with Iraq and Syria were closed. However, the Trebil border crossing between Jordan and Iraq reopened to limited trade and passengers in August 2020, and the Nasib - Jaber border crossing between Jordan and Syria reopened in August 2021 at full capacity.
Limited Critical Natural Resources
Jordan lacks critical natural resources and is also one of the most water-scarce countries in the world. The kingdom’s renewable water supply currently only meets about two-thirds of the population’s water demands, with groundwater being used twice as quickly as it can be replenished.
High Energy Tariffs
Jordan overcompensated for power shortages in 2013-2017 by investing in numerous power purchase agreements causing its electricity grid to be nearly 50 percent over capacity, driving up the average electricity price for both households and businesses. In most cases, businesses pay above average and above market rates while households see subsidized, lower than average rates. High electricity costs for businesses reduce competitiveness and profitability. In March 2022, Jordan made incremental adjustments to its electricity pricing structure aimed at correcting existing distortions.
Business Climate
Despite business climate improvements in recent years, doing business in Jordan can be more difficult than elsewhere in the region. Companies report frequent changes in senior Jordanian government officials, frequent alterations or amendments to legislation, outdated standards, and a slow bureaucracy adversely affect commercial activity. For companies establishing a physical presence, business registration can be lengthy and tedious. Likewise, dissolving a failed business endeavor can be costly.