Exports now cover 49 per cent of imports – A step forward, but not enough

Ammon

29-05-2025

Raad Mahmoud Al-Tal The Department of Statistics has released the foreign trade data for the first quarter of 2025, showing a modest improvement in export performance. However, the trade balance remains significantly negative. Total exports rose by 11.6 per cent, reaching JD2.31 billion, while imports increased by 6.6 per cent to JD4.68 billion. As a result, the trade deficit widened by 2.2 per cent to JD2.37 billion compared to the same period in 2024.
One of the most important indicators in external trade analysis is the export-to-import coverage ratio, which measures how much of a country's imports are financed by its exports. A ratio of over 100 per cent indicates a surplus, while a lower ratio reflects a trade deficit that must be financed externally. For Jordan, this ratio improved slightly from 47 per cent in Q1 2024 to 49 per cent in Q1 2025. In practical terms, this means exports now cover nearly half of imports. While still far from a balanced trade position, this marks a small but encouraging shift toward greater economic self-reliance.
In March alone, the coverage ratio reached 53 per cent, compared to 48 per cent in March 2024. This reflects renewed momentum in key export sectors. National exports grew by 11.7 per cent, rising from JD1.87 billion to JD2.09 billion. While exports of raw phosphate and pharmaceuticals declined, these losses were offset by gains in chemical fertilizers, jewelry, and other products. Additionally, re-exports increased by 10.4 per cent, signalling more activity in trade and logistics.
On the import side, the 6.6 per cent rise can be attributed to stronger domestic demand and possibly higher international prices. Notable increases were recorded in industrial machinery (29 per cent), electrical machinery (45.8 per cent), and cereals (34.1 per cent)—indicating continued investment and economic activity. On the other hand, imports of crude oil and its derivatives fell by 6.1 per cent, and vehicle imports dropped by 24.4 per cent, which helped ease the overall import bill.
Export composition reflects some level of diversification, with strong performance in garments, fertilisers, potash and jewelry. These sectors are benefiting from stable international demand. However, the decline in phosphate and pharmaceutical exports suggests market or production challenges. Import patterns show a high reliance on capital goods, which could indicate productive investments, but also highlight the economy's continued dependence on external supply chains, a structural vulnerability.
Despite better export performance, the overall trade deficit remains large at JD2.37 billion. This highlights Jordan's continued reliance on imports to meet domestic needs. Narrowing this gap will require deeper structural reforms, especially boosting productive sectors and expanding access to international markets.
On a positive note, exports increased to several important regions, including Arab countries, North America, India and parts of Europe such as the Netherlands. This reflects some success in market diversification. However, the fact that imports from many of these same regions also grew means that trade with them still tends to be unbalanced. More targeted trade policies are needed to promote local exports and reduce non-essential imports.
Improving the export-to-import ratio requires more than just short-term gains. It demands long-term reforms focused on strengthening export-oriented sectors, encouraging domestic investment, and upgrading trade infrastructure. A more competitive business environment, better logistics, and support for high-value-added industries are all essential to boosting Jordan's export capacity.
While the current coverage ratio of 49 per cent marks an improvement, it remains insufficient. The medium-term goal should be to lift this ratio above 60 per cent. This is achievable if local production is supported more effectively, the export base is diversified, and dependence on imports is reduced. A more balanced trade account is not only desirable, it is necessary for sustainable economic growth and resilience.
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