Jordan’s economy hit as Iran war continues

Jordan is facing growing economic strain from the war in Iran, as higher energy prices, disrupted trade routes and falling tourism push up costs across the country, The National reported on 31 March.

The conflict has driven up global oil prices, increasing Jordan’s import bill in a country heavily reliant on foreign energy. Electricity production costs have risen by $140 million following a halt in Israeli gas supplies, while higher shipping and insurance costs have raised the price of goods entering the country, adding to inflationary pressures.

Prices of basic goods have risen sharply. Corn oil increased from $10 to $17 for 10 litres, while rice rose from $1 to $3 per bag. Authorities have restricted bulk purchases of staple foods to limit hoarding, as importers pass rising costs on to consumers.

Businesses are also facing higher costs. Fertiliser prices have increased, while spare parts have risen by around 20%, with some suppliers warning of potential shortages if supply disruptions continue. Officials said continued disruption could affect the availability and pricing of essential goods.

In response, the government has introduced measures to limit the impact on public finances and households. Authorities have waived some taxes, increased subsidies and ordered public bodies to tighten spending, as other countries in the region have introduced energy-saving measures to manage rising costs. Measures have also been introduced to support businesses, including covering borrowing costs for tourism operators affected by a sharp drop in visitors.

Jordan has also faced direct spillover from the conflict, with Iranian missiles and drones intercepted over the kingdom since the war began, though no major damage has been reported. The United Nations said the attacks have affected multiple countries across the Gulf region.

The country’s economic exposure reflects its reliance on imported fuel and vulnerability to regional instability. Rising prices have added pressure on household budgets and government finances at a time of prolonged economic stagnation.

The war, which began on 28 February, has had wider economic effects across the Middle East, disrupting energy markets and supply chains. Officials and analysts said the impact on Jordan is likely to continue if the conflict persists.

The National, OHCHR, Maghrebi.org