Khaberni - An international economic report anticipates that the Central Bank of Jordan will carry on with its monetary easing cycle in 2026, in line with global monetary policy trends and alongside the US Federal Reserve, amidst controlled and low inflation rates in the Kingdom.
A report issued by "Fitch Solutions" stated that Jordan, along with several Gulf Cooperation Council countries, reduced interest rates by a cumulative total of about 75 basis points during 2025, predicting that Jordanian monetary policy would likely cut an additional 50 basis points in 2026, should the US Federal Reserve continue on this easing path.
The report clarified that the interest rate cut aims to support economic activity and enhance credit availability, at a time when inflationary pressures are receding, while maintaining monetary stability.
Inflation in Jordan remains under control
According to the report, the inflation rate in Jordan is expected to stay at around 1.7% in 2026, compared to approximately 1.9% in 2025, despite an accelerating economic growth rate, reflecting the Jordanian economy's capacity to absorb demand without generating high price pressures.
The report attributed this to the continued decline in global energy prices, along with the strength of the US dollar to which the Jordanian dinar is tied, which limits the increase in import costs and keeps core and overall inflation within moderate levels.
The report indicated that Jordan is among the countries expected to experience the lowest regional inflation levels during 2026, in comparison with higher averages in the Levant and North Africa, enhancing price stability and bolstering market confidence in monetary policy.
Despite positive expectations about monetary easing, the report warned that interest rates in Jordan will remain higher than pre-COVID-19 pandemic levels, which could place relative pressures on household demand, especially in the housing and durable goods sectors.
It mentioned that the continuation of these levels might limit the expansion of fiscal spending, if the anticipated cuts are not accompanied by a tangible improvement in borrowing costs.
The report pointed out that monetary policy risks in 2026 are balanced, noting that any escalation in global trade tensions, or a resurgence of inflationary pressures in the United States, might prompt the US Federal Reserve to pause interest rate cuts, which would reflect on the orientations of central banks linked to it, including Jordan.
Conversely, the report noted that a slowdown in the US labor market or weak economic activity could pave the way for a larger interest rate cut, which would provide a broader margin for local monetary easing.
