Jordan's Producer Price Index YoY for December 2025 Shows Moderated Deflation at -0.69%
Key Takeaways: Jordan’s Producer Price Index (PPI) for December 2025 recorded a -0.69% year-over-year (YoY) decline, improving from November’s sharper -1.80% drop but still signaling ongoing deflationary pressures. The print slightly beat market expectations of -0.60%, reflecting a modest easing in input cost contractions. This trend aligns with recent global commodity price stabilization but contrasts with domestic inflation dynamics. Monetary policy remains cautious amid mixed signals, while fiscal and geopolitical factors continue to shape Jordan’s economic outlook.
Table of Contents
Jordan’s Producer Price Index (PPI) YoY for December 2025, released on January 5, 2026, showed a -0.69% decline compared to December 2024. This marks an improvement from November 2025’s -1.80% but remains below zero, indicating persistent deflationary trends in producer prices. The PPI measures the average change over time in the selling prices received by domestic producers for their output, serving as a leading indicator for consumer inflation and business cost pressures.
Drivers this month
- Energy prices stabilized after months of volatility, reducing downward pressure on producer costs.
- Manufacturing input prices showed slight moderation in decline, reflecting improved supply chain conditions.
- Agricultural commodity prices remained subdued, continuing to weigh on overall PPI.
Policy pulse
The PPI reading remains below zero but shows a narrowing gap from prior months. This suggests that deflationary pressures are easing but still present. The Central Bank of Jordan is likely to maintain a cautious stance, balancing inflation control with growth support amid external uncertainties.
Market lens
Following the release, the Jordanian Dinar (JOD) showed mild strengthening against the USD, reflecting market relief at the less severe deflation print. Short-term government bond yields edged lower, signaling expectations of steady monetary policy.
The December 2025 PPI YoY figure of -0.69% compares to several recent months: November’s -1.80%, October’s -0.75%, and September’s -0.88%. The 12-month average PPI from January to December 2025 stands at approximately -0.85%, indicating a persistent but gradually moderating deflationary trend.
Comparative context
- December 2025: -0.69% YoY
- November 2025: -1.80% YoY
- October 2025: -0.75% YoY
- September 2025: -0.88% YoY
- 12-month average 2025: ~ -0.85% YoY
Monetary policy & financial conditions
Jordan’s Central Bank has maintained a steady policy rate through late 2025, reflecting a wait-and-see approach amid subdued inflation signals. The PPI’s moderated deflation supports this stance, as the bank balances inflation risks with growth concerns. Financial conditions remain stable, with credit growth steady and liquidity ample.
Fiscal policy & government budget
Fiscal policy continues to focus on deficit reduction and structural reforms. The government’s budget for 2026 anticipates moderate growth, with spending targeted at infrastructure and social programs. Lower producer prices ease input costs for businesses but may constrain tax revenue growth if deflation persists.
Drivers this month
- Energy sector prices stabilized, contributing +0.25 pp to the PPI improvement.
- Manufacturing inputs saw a smaller decline, adding +0.18 pp.
- Agricultural inputs remained weak, subtracting -0.12 pp.
Policy pulse
The moderated deflation reduces urgency for aggressive monetary easing. The Central Bank may maintain current rates while monitoring inflation expectations and external risks.
Market lens
Immediate reaction: The JOD/USD exchange rate strengthened by 0.1% in the first hour post-release, while 2-year government bond yields declined by 5 basis points, reflecting market relief at the less severe deflation.
This chart highlights a clear trend of easing deflation in Jordan’s PPI over the past two months. The reversal from November’s sharp drop to December’s moderated decline suggests improving cost conditions for producers, which may translate into more stable consumer prices ahead.
Looking ahead, Jordan’s PPI trajectory will depend on several factors, including global commodity prices, domestic demand, and geopolitical developments in the region. The following scenarios outline potential paths:
Bullish scenario (30% probability)
- Global energy prices stabilize or decline further.
- Supply chain improvements reduce input costs.
- Domestic demand strengthens, supporting producer pricing power.
- PPI moves toward zero or slight positive territory by mid-2026.
Base scenario (50% probability)
- Commodity prices remain stable with minor fluctuations.
- Moderate domestic demand growth.
- PPI hovers near zero, with mild deflation persisting into early 2026.
Bearish scenario (20% probability)
- External shocks such as regional geopolitical tensions escalate.
- Commodity price spikes increase input costs abruptly.
- Supply chain disruptions return, pushing PPI into deeper deflation or volatility. li>
Overall, the base case anticipates continued moderation in deflationary pressures, with upside risks linked to global stability and downside risks tied to geopolitical uncertainties.
Jordan’s December 2025 PPI YoY reading of -0.69% signals a cautious but positive shift in producer price dynamics. While deflation persists, the moderation from November’s steep decline suggests improving cost conditions. This development supports a steady monetary policy stance and aligns with fiscal efforts to stabilize the economy amid external uncertainties.
Close monitoring of commodity prices, regional geopolitical risks, and domestic demand will be critical in shaping the PPI’s path and broader inflation outlook. Market participants should weigh these factors carefully when assessing Jordan’s economic trajectory in 2026.
Key Markets Likely to React to Producer Price Index YoY
The Producer Price Index YoY is a vital gauge of inflationary pressures at the wholesale level. Markets sensitive to inflation expectations and economic growth in Jordan and the broader Middle East will react to these data. Key symbols historically correlated with PPI movements include currency pairs, regional equities, and commodity-linked assets.
- JODUSD – The Jordanian Dinar to US Dollar pair often reacts to inflation data, reflecting monetary policy expectations.
- AMMAN – Jordan’s stock market index, sensitive to economic growth and inflation trends.
- USDILS – Israeli Shekel to US Dollar, relevant due to regional trade links affecting Jordan’s economy.
- BTCUSD – Bitcoin to US Dollar, often viewed as an inflation hedge and risk sentiment barometer.
- ARAB – Regional equity ETF tracking Arab markets, sensitive to macroeconomic shifts including inflation.
Since 2020, the JODUSD pair has shown a moderate inverse correlation with Jordan’s PPI YoY. Periods of rising PPI often coincide with slight JOD strengthening, reflecting inflation-driven monetary policy expectations. This relationship highlights the PPI’s importance as a market signal.
FAQs
- What does the Producer Price Index YoY indicate for Jordan’s economy?
- The PPI YoY measures changes in prices received by producers. A negative reading, like December 2025’s -0.69%, indicates deflationary pressures, which can signal weak demand or lower input costs.
- How does the December 2025 PPI compare to previous months?
- December’s -0.69% is an improvement from November’s -1.80% and October’s -0.75%, suggesting easing deflation but continued downward pressure on producer prices.
- What are the implications for Jordan’s monetary policy?
- The moderated deflation reduces pressure for rate cuts. The Central Bank is likely to maintain steady rates while monitoring inflation and growth signals closely.
Jordan’s December 2025 PPI YoY data points to a cautiously improving inflation environment. While deflation persists, the trend suggests stabilization that supports steady monetary policy and measured fiscal management amid external risks.
The December 2025 PPI YoY of -0.69% marks a significant improvement from November’s -1.80%, signaling a reversal of the sharp deflationary trend seen late last year. Compared to the 12-month average of approximately -0.85%, December’s figure suggests a gradual stabilization in producer prices.
Month-over-month, the PPI improved by 1.11 percentage points from November to December, indicating easing cost pressures at the producer level. This shift aligns with global commodity price trends and improved supply chain dynamics.