By: Dr. Adli Kandah
Recalculating the Gross Domestic Product (GDP) and updating the base year is neither a political nor a financial move; it is a purely statistical and methodological procedure that countries carry out periodically to ensure that their economic figures align with the latest international standards. The economy is not static, and transformations in production sectors require continuous updates to measurement methods.
In Jordan, the national accounts have undergone three major GDP recalculations and base year updates since 1990, all in response to local economic developments and in line with international recommendations:
1. First Update (mid-1990s): The base year 1994 was adopted, marking the first comprehensive review of GDP calculation using more modern methodologies at that time.
2. Second Update (mid-2010s): The base year 2016 was adopted according to the System of National Accounts (SNA 2008), along with a comprehensive expansion of surveys and data sources.
3. Third Update (2025): The base year was updated from 2016 to 2023 after four years of technical work, using extensive surveys, narrative data, and administrative records that reflect the development of the digital economy and modern services.
These three updates — 1994, 2016, and 2023 — represent all the officially recognized major GDP recalculations in Jordan since 1990.
The current update falls within the international scientific framework based on the recommendations of the System of National Accounts, which emphasizes the necessity of updating the base year every 5–10 years due to changes in economic structure, prices, and technology. Each major update usually results in differences in GDP estimates, depending on the inclusion of sectors that were previously excluded or poorly measured. It is important to stress that recalculating GDP does not alter public debt nor automatically improve creditworthiness unless actual economic indicators improve. The increase resulting from the update is statistical, not economic, and international institutions understand this.
The claim that the goal is to “reduce the debt-to-GDP ratio” is an oversimplification that ignores the nature of national accounts and the role of statistics in providing a more accurate picture of the economy, not a prettier one. The real objective is to improve the accuracy of Jordan’s economic measurement, enhance policymaking capabilities based on reliable and updated data, and increase transparency and alignment with global standards.
Modern economies change faster than older measurement methods can keep up. New sectors emerge, informal activities expand, consumption patterns evolve, and technology penetrates every aspect of life. Measuring today’s economy with outdated tools and references that are over a decade old is illogical.
Updating the base year — the reference year for calculating real prices and economic changes — is not a statistical luxury but a scientific necessity to ensure that indicators reflect reality as it is, not as it was.
Simply changing the base year alters the entire economic picture. Sectors that were minor years ago are now significant, and some activities previously unaccounted for are now part of GDP, such as the digital economy, app-based services, and e-commerce. This explains the apparent rise in GDP to about JD 39.8 billion: the economy did not suddenly grow; we are now measuring its real size more accurately.
The importance of a larger GDP lies in its ability to redraw fundamental economic indicators. When GDP grows, the debt-to-GDP ratio improves, financial risks decrease, and the state gains better access to financing, potentially allowing additional resources to be directed toward public services. Moreover, this update provides a clearer picture to investors regarding market size and sector diversity, boosting confidence and encouraging investment and job creation in the medium and long term.
The new base year is also a tool for calculating growth, inflation, and real prices using modern methodology. Without updating, figures become distorted and may depict an economy that does not exist in reality. With the update, growth becomes more realistic, inflation more accurate, and temporal comparisons more consistent, enhancing the credibility of data both domestically and internationally. Scientifically, this update allows for a reevaluation of the economic structure, identifying the most dynamic and most vulnerable sectors, providing policymakers with deeper insights to guide policies more effectively.
But what does this mean for the citizen?
This update in itself does not directly raise wages or lower prices, but it opens the door to indirect yet fundamental benefits:
• Strengthening the economy reduces risks and improves the investment environment, contributing to job creation.
• Using updated data in public policies reduces waste and increases spending efficiency, gradually improving service quality.
• Enhancing public confidence, as citizens realize that their country’s economy is larger and more diversified than previously thought, making the future less uncertain and more predictable.
In light of this updated view of the economy’s size and composition, it is essential to consider Jordan’s economic update plan, adopted since mid-2022, as the main executive framework to convert numbers into tangible results. Despite the comprehensiveness of the plan, updating the base year reveals sectors that have become more significant, such as financial technology, the digital economy, logistics services, and creative industries — sectors that were underrepresented when the plan was drafted over two years ago.
Therefore, the plan requires smart updating and repositioning, taking into account the new data and reorganizing priorities based on the fastest-growing and most job-creating sectors. It also necessitates strengthening performance measurement tools and linking the general budget to the plan’s programs to ensure that the vision of the update translates into tangible results in productivity, innovation, and an improved business environment. Statistical updates without policy and structural updates remain incomplete.
Updating the base year and increasing GDP is not just economic news; it is a redrawing of the national economic map. It represents a transition from a blurred view to a clearer picture, and from incomplete estimates to more comprehensive data. But the real value of this change is realized only when this accurate picture is translated into bold reform policies, executive will, and a developmental vision that leverages the numbers instead of merely announcing them.
The biggest question — one that concerns citizens above all — is:
Will the state succeed in turning this “larger economy” into a “better life”?
The answer does not lie in statistics but in how the next phase is managed.
