AMMAN — A new report by the Jordan Chamber of Industry (JCI) has raised concerns over the impact of soaring household debt on domestic demand and the performance of the country’s industrial sector.

The report highlighted that the local market is vital for the stability of national industry, serving as the main outlet for production and a key source of employment, especially in labour-intensive sectors.

However, rising household debt and higher monthly debt obligations are eroding disposable income, creating what the JCI termed as “debt-constrained local demand.”

The chamber cited data from the Central Bank of Jordan which showed that loans to individuals climbed from JD8.7 billion in 2016 to nearly JD14 billion by the end of 2024, with the number of borrowers exceeding JD1.23 million.

The report warned that Jordan’s household debt levels are more than double those in many developing countries and significantly higher than in neighbouring states.

The chamber said that the monthly debt burden ratio (DBR) has reached 43.1 per cent, meaning nearly half of borrowers’ incomes are diverted to debt repayment rather than local spending.

“This trend has slowed consumption, heightened price sensitivity, and weakened demand for industrial goods,” the report said.

Despite these challenges, the chamber emphasised that the weakness in local demand does not reflect the capacity or quality of Jordanian industry, which has sufficient production capabilities to meet domestic needs. “The pressure on demand, however, has affected factory operations, internal sales, and investment potential.”

According to the report, the industrial sector employs around 268,000 workers, making any decline in demand a direct threat to jobs and income.

It stressed that addressing weak local demand requires a comprehensive approach, including protecting disposable income, reducing financial burdens, and offering responsible financing to support the purchase of locally produced goods.

The chamber called for urgent measures to boost domestic demand, noting it is key to enhancing the industrial sector’s contribution to economic growth, job creation, and overall economic resilience, in line with Jordan’s Economic Modernisation Vision.

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