Khaberni - The Jordan Chamber of Industry issued a specialized analytical report discussing the developments in individual debt in Jordan and its direct impacts on local demand and the performance of the industrial sector, confirming that the increased debt burden is now one of the main factors restricting local consumption and pressing on the sustainability of industrial growth.
The report explained that the local market is the fundamental pillar for the stability of the national industry, and a major source for product distribution and maintaining employment opportunities, especially in labor-intensive industrial sectors. However, the growth of household debt and the increasing burden of monthly debt service have led to erosion of disposable income, creating what could be described as "local demand constrained by debt".
Informed by data from the Central Bank of Jordan, the Jordan Chamber of Industry highlighted that the balance of loans granted to individuals rose from about 8.7 billion dinar in 2016 to nearly 14 billion dinar at the end of 2024, coinciding with the rise in the number of borrowers to over 1.23 million, reflecting an expansion in reliance on bank financing to cover housing and personal consumption needs.
The Jordan Chamber of Industry stated that individual debt levels in the kingdom have reached levels more than double those in developing countries, and are significantly higher compared to neighboring countries.
The Chamber pointed out that the International Monetary Fund confirms that high individual debt depresses economic growth in the medium and long term, despite its potential positive impact on short-term growth.
The report also pointed out that the monthly debt burden rate (DBR) for individuals was about 43.1% at the end of 2024, which means that nearly half of the borrowers' income is redirected to meet financial obligations instead of being spent in the local market, which reflected on consumption levels, increased price sensitivity among consumers, and weakened the demand for industrial goods.
The Chamber confirmed in its report that weak local demand does not reflect a decline in the capacity or quality of the Jordanian industrial product, but is a direct result of accumulated financial pressures on consumers, which reflected on the volume of domestic sales, operational capacity of factories, and their ability to expand and invest, despite the sector's production capacities capable of meeting local market needs.
The Jordan Chamber of Industry also warned of the implications of this reality on employment levels, particularly in industries related to consumable and durable goods, which employ a wide section of the workforce, pointing out that the industrial sector employs about 268,000 workers, making any decline in local demand a direct pressure factor on the labor market and income.
The Chamber stressed that addressing weak local demand requires a comprehensive approach that focuses not only on supply-side policies but also balanced policies that address the demand side, including protecting disposable income for individuals, reducing financing burdens, and developing responsible financing tools targeted at supporting the purchase of national industrial products, without compromising financial stability requirements.
The Jordan Chamber of Industry concluded its report by emphasizing that revitalizing local demand is a fundamental pillar for maximizing the contribution of the industrial sector to economic growth and job creation, enhancing economic and social security, in alignment with the goals of the economic modernization vision, and strengthening the resilience of the national economy.
