In recent years Jordan has made considerable progress toward achieving macroeconomic stability and implementing economic reform, especially in the areas of privatization and improving the business and investment climate. It stands out in its region as a model of sound, investor-friendly economic policy. Jordan’s recent economic performance has exceeded expectations. Real GDP growth was 3.2% in 2003 led by a strong export performance. Growth exceeded 5% in 2004 and 5.5% in 2005, according to the IMF. The World Bank estimates that the Jordanian economy is likely to post a 6% growth in 2006.
Jordan is looking to establish itself as a base for regional and international trade, particularly in the midst of the reconstruction of Iraq. Iraq is traditionally Jordan's largest trading partner and the Kingdom is benefiting from the booming trade with a newly resurgent Iraq economy.

Investments reached $1.05 billion (JD748) million in 2005, $465.3 million (JD330 million) higher than the &590 million (JD418 million) in 2004, showed official statistics. Foreign capital amounted to $368 million (JD276 million), representing 37 per cent of total investments compared to 22 per cent in 2004. Industry, transport and the distribution network of the water, gas and oil sectors attracted 96 per cent of total foreign investments, whereas the hospitality and agriculture sectors accounted for the remainder.
At present, investment promotion is handled by several organizations including the JIB, the Jordan Industrial Estate Corporation (JIEC) and the Jordan Export Development and Commercial Centers Corporation (JEDCO). The tariffs and tax exemptions in addition to the establishment of the One Stop Shop facilitated licensing procedures to attract foreign capital.

At the banking sector level, the year 2005 showed prominent activity. Measured by the consolidated balance sheet of commercial banks, total assets grew by JD 3,265 million, i.e 54.1% above their growth in 2004. Total deposits rose by 13.4% during the year, equivalent to $ 2.2 billion. Within the context of a strong economic growth performance giving room to better lending opportunities, total banking sector loans grew by a significant $ 2.2 billion since the beginning of the year, or 67.8% above the previous year’s growth.

At the capital markets level, Jordan’s equity market has witnessed one of its booming years in 2005, unprecedented in the contemporary economic history of the country. The market’s weighted price index grew by 92.9%, driven by a strong domestic and regional demand for Jordanian equities. As such, the market capitalization now stands at circa three times the country’s GDP, one of the highest levels in the whole region. As a result, the market’s price to earnings ratio and price to book value ratio registered levels quite above the average currently reported for emerging markets, but were in line with broad regional averages.

Jordan is undergoing a profound socio-economic development, coupled with a strong boom in the tourism and construction sector. The trend points to continued growth and a healthy economy over the next few years, and as the Iraq economy continues to heal itself, it will have a multiplying effect on Jordan. Land and Survey Department (LSD) Director General Abdul Mu’im Samarah recently predicted that total investments in the real estate sector in 2006 would range between $4.9 billion and $5.65 billion (JD3.5-4 billion). Significant investments in tourism, hospitality and leisure projects are underway in Jordan. The number of hotels has increased from 247 hotels in 1999 to more than 280 by the end of 2005. Development in the hotel and leisure sector is taking place mainly in three areas, the capital Amman, the Dead Sea and the Aqaba region.

Jordan is also benefiting from significant number of Iraqis living in Amman, and conducting their business out of Amman. And there has been a marked increase in demand for real estate (residences and commercial) from Jordanian expatriates, who are benefiting from the oil boom in the Gulf, and who are further encouraged to by the local banks’ increased willingness to finance real estate purchases. This activity reached the $1 billion mark in 2005, up from $590 million in 2004. Housing is also part of the current real estate boom especially in single family houses and apartment buildings, particularly in the middle to upper segments of the market. Plus, government allocations in infrastructure development, particularly in the water and sewer infrastructure, energy (expansion of electrical networks, expansion and upgrade of petroleum refinery), and other sectors are creating additional dynamism in the investment market.

Construction activity in Jordan continues its progress driven by enhanced private sector investments and external demand. Turnover in the real estate market reached around $4.24 billion (JD3 billion) by end 2005 exceeding the 2004 figure by 70-80 per cent. Despite the significant contribution by non-Jordanians, Jordanians remained at the forefront with more than 80 per cent market share. Iraqis topped the list of non-Jordanians by accounting for 50 per cent followed by former Jordanians who now hold other nationalities. Nationals of Gulf states came in third place. Over the last two decades, war and periodic political upheavals in neighboring countries have resulted in explosive urban growth in Jordan creating extensive demand for housing projects.