Jordan is Expensive & Here Are Some Reasons Why

As of 1 July 1950, the Jordanian Dinar (JOD) became the kingdom’s official currency, ending the use of the Palestinian Pound. The dinar, commonly referred to as JD, is divided into 100 qirsh (also called piastres) and 1000 fils.

Note: Even though technically there are 1/2, 1 and 2 1/2 qirsh coins in circulation, it wasn’t until months into living in Jordan that I actually saw a 1 qirsh coin. With that said, don’t be shocked if you’re not given the correct amount of change back down to the qirsh.

Jordanian dinar banknotes and coins background
image source: treasuryvault.com

The Dinar & Dollar Go Together Like Bread & Butter

Since October 23, 1995, the Jordanian Dinar has been officially pegged to the US dollar, with $1 = 0.709 JD, which translates to approximately 1 JD = 1.41044 dollars. To translate this “pegging” simply, Jordan is #6 on the on the list of the top 10 most expensive currencies in the world.

dinar to dollar

Expensive for Both Tourists & Locals

This means for the average Joe, Jordan is an expensive place to both live in and to travel to. My experience living in Amman means I definitely vouch for that, but don’t take it from me, according to the Economist, Jordan’s capital city of Amman ranks #29 in the world on the list of cities with the most expensive cost of living.

What exactly does expensive look like in real numbers? Budgetyourtrip.com has broken prices down into the following for mid-range (meaning not cheap & not luxury) travelers:

  • JD 47 ($67) is the average daily price for traveling in Jordan.
  • The average price of food for one day is JD 11 ($16).
  • The average price of a hotel for a couple is JD 41 ($58).

See the full list of average prices in Jordan here.

al-quds-falafel-amman
Falafel, the only thing in Jordan that isn’t expensive

When it comes to living in Jordan, i.e. not being a tourist, then your day to day life is bound to be expensive, unless you’re earning a big check at the end of the month that makes up for the crap JD to $/€/etc exchange rate. However, in general, know that the salaries are very low in Jordan, with the average monthly salary being $637!

A Poll: Expensive or Cheap, Compared to Back Home

To get a bit more input about what expats find far too expensive and surprisingly cheaper in Amman compared to their home countries, I put up a poll in the Expats & Locals Facebook group. Here’s a mini-compilation of what people said:

$$$$ More Expensive

  • “Vitamins and food supplements have exorbitant prices. There’s a one brand only monopoly.”
  • “Everything is crazy prices…. from adult to kids clothes! Shoes (unless you buy the cheap and poor quality) and food, unless it’s from Jordan!”
  • Gym memberships!”
  • “All are overpriced! there’s no such word as cheap in Jordan, only salaries are cheap I guess”
  • “Most of the things here are overpriced but I find the most overpriced is entertainment like coffee shops, entertainment for kids etc.”

$ Cheaper

And here are some items they said were cheaper in Jordan:

  • “Taxis and Uber/Careem are much cheaper than in the west.”
  • “Water, electricity is very cheap per month compared to Australia (at least) by a factor of 10-15 times.”
  • “Data phone plans are about half the cost of what you would pay in Australia, for both mobile and wireless internet, as well as fiber optic.”
  • “Speeding fines and traffic fines are cheap.”

Some Causes for Jordan’s Hefty Price Tags

Now that we’ve established that Jordan is indeed an expensive place to live, unless we talk about getting pulled over by a cop, the next question is why? Obviously, the full explanation could instantly cause this article to go from a short read to a full year economics course, so let’s keep it brief with some handy bullet points for just a few of the reasons why Jordan is expensive:

  • After King Abdullah II’s accession to the throne in 1999, liberal economic policies were introduced that resulted in a boom that continued through 2009. Jordan has a developed banking sector that attracts investors due to conservative bank policies that enabled the country to weather the global financial crisis of 2009. (Source)
  • Imports: The dinar is continuously gaining against major international currencies, such as the euro and the yen. And imports from the European countries and Japan have increased. The decline in the value of imports from countries whose currencies are depreciating against the Jordanian dinar and the US dollar diminishes government revenues from tariff and sales tax. This means that in a way the government is subsidizing imports from EU, Japan, and other countries. (Source)
  • Due to a decrease in prices of fruits and vegetables because of excess supply and decline in exports (because of increase in imports).
  • Remittance: According to the World Bank data on remittances, Jordan has ranked constantly among the top 20 remittances-recipient countries over the last decade. The host countries that have absorbed most of the Jordanian expatriates are Saudi Arabia and the United Arab of Emirates (UAE), where the available recorded number of the Jordanian expatriates, working abroad, indicates that about 90% of these migrants are working in Persian Gulf countries. Since the mid-1970s, migrants’ remittances are Jordan’s most important source of foreign exchange and a decisive factor in the country’s economic development and the rising standard of living of the population. (Source)
  • The Iraq War’s Impact on Growth and Inflation in Jordan – The popular perception in Jordan is that the approximately 800,000 Iraqis who fled to Jordan during the 2003 Iraq War single-handedly caused rampant inflation. Research tells a different story. The Iraq war in a broad sense has, in many ways, caused Jordan’s inflation rate to rise – but the presence of the Iraqis in Jordan, and the associated rising real estate prices have relatively little to do with it. It appears instead that the end of subsidized fuel from Iraq, high international oil prices, exports of the domestic food supply, rising costs of food imports, and unfavorable exchange rates have done far more to spur inflation in Jordan. (Source)
  • The war in Syria has created a large economic burden in Jordan with unprecedented refugee influx, disrupted trade routes, and lower investments and tourism inflows. (Source)
  • Other major challenges facing Jordan include high unemployment, a dependency on grants and a continued pressure on natural resources. (Source)

2 thoughts on “Jordan is Expensive & Here Are Some Reasons Why

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