The economic and political changes that occurred in the region in general and in Jordan, in particular, resulted in an augmentation of the economic and social demands of the growing population, as forced immigration contributed to the population’s inflation, which consequently led to growing needs (1, 2). The region’s instability led to the accumulation of both external and internal debt; in turn, the extreme scarcity of financial and economic resources inflicted the Jordanian economic crisis (3). The combination of these factors led to a significant reliance on foreign aid and loans, resulting in a persistent fiscal deficit that increased Jordan’s debt as the case of the most third-world countries (4). Jordan first resorted to debt in 1949, when it signed an external loan for one million JDs from the British government. Despite the drastic effects of Jordan’s economic crisis, there are indicators of the success of the Economic Adjustment Program, which the Jordanian government is implementing with the cooperation of the International Monetary Fund.

During the study period (2008–2020), Jordan’s public debt experienced a pronounced upward trajectory, reflecting persistent fiscal pressures and repeated external shocks. According to official data from the Ministry of Finance, total public debt increased from approximately USD 14.4 billion in 2008 to over USD 43 billion by 2020, rising from about 65% of GDP to more than 90% by the end of the period. This expansion was driven by sustained budget deficits, rising public expenditure, regional instability, and the economic impact of hosting large numbers of refugees, in addition to the global financial crisis and its aftermath. While external debt constituted a significant share in the earlier years of the period, domestic debt grew more rapidly over time, indicating a strategic shift toward local currency borrowing to mitigate exchange rate risk. These developments highlight the increasing importance of effective debt management strategies, particularly those concerned with maturity structure and interest rate exposure, which form the core focus of the present study (6–8).

The significance of this study lies in its status as one of the first Jordanian studies to investigate this topic. Its importance also rests on assisting decision-makers of Jordanian financial policies by providing indicators about Jordan’s capacity to pay off debt and its susceptibility to changes in interest rates; the study then provides appropriate recommendations to pave the way for further investigation on the subject. Furthermore, the objective of this study is to measure the duration of local governmental debt (in JDs) to figure out the maturity date’s duration of these debts and measure the extent to which debt is influenced by the change in interest rates, and the government’s capacity to repay debts and obligations during the study’s period (2008–2020).

This study aims to determine the duration of the Jordanian government and its ability to repay debt, considering the country’s frequent reliance on external or internal debt, which has led to increasing debt amounts. Increasing the sum of debt complicates its reimbursement process with a load of interest accumulation, which affects Jordan’s financial security. The primary objective of this study is to examine the hypothesis that the duration of Jordanian debt significantly differs from the average debt duration. The investigation aims to identify distinct characteristics or patterns within Jordan’s debt structure that may differentiate it from conventional debt profiles. Such an analysis is crucial for providing insights into the country’s financial management strategies and evaluating the potential implications on economic stability and fiscal policy.

Jordan’s public debt trajectory dates back to the late 1980s, with the 1988 debt crisis representing a pivotal turning point in the country’s fiscal and monetary framework. This crisis was characterized by acute balance-of-payments pressures, a sharp depreciation of the Jordanian dinar, and a rapid accumulation of external debt, which collectively prompted the implementation of IMF-supported stabilization and structural adjustment programs aimed at restoring macroeconomic stability (9, 10).

During the 1990s and the early 2000s, external debt constituted the largest share of Jordan’s total public debt, reflecting the country’s reliance on concessional financing, bilateral loans, and foreign aid. Over time, however, financial sector reforms and the gradual deepening of domestic capital markets facilitated an increased use of internal debt instruments, particularly government treasury bonds and bills denominated in Jordanian dinars, as part of a broader effort to diversify funding sources and reduce vulnerability to external shocks (11).

From the mid-2000s onward, and more markedly following the global financial crisis of 2008, both internal and external public debt expanded substantially. This expansion was driven by persistent fiscal deficits, heightened regional instability, large refugee inflows, and rising public expenditure. Notably, domestic debt grew at a faster pace than external debt, reflecting a deliberate policy shift toward local currency borrowing in order to mitigate exchange rate risk and strengthen debt sustainability (12, 13).

This historical evolution provides essential macroeconomic context for the present study and supports the selection of the 2008–2020 period, during which debt accumulation intensified and debt management considerations became increasingly critical. Within this context, the application of duration-based models offers a focused and theoretically grounded framework for evaluating the maturity structure and interest rate risk of Jordan’s public debt portfolio.

Using Macaulay’s Duration model, the duration of Jordanian debt in 2008 was found to equal 0.015 years. Using the Modified Duration model, it was found to equal 0.014 years, but when calculating the debt’s average, it turned out to equal 3.662 years. This means that the Jordanian debt in 2008 was relatively stable and less sensitive to interest rate volatility. The low numerical values of the Macaulay and Modified durations do not indicate short-term borrowing but rather reflect the discounting effect of future cash flows and the weighting structure used in these models. When these durations are aggregated across the entire portfolio, the average duration of 3.662 years provides a more realistic measure of the time-weighted exposure of the government’s debt. This level of duration implies that, on average, it would take approximately 3.7 years for investors to recover the present value of their investment in government debt instruments, confirming that the debt is of a medium-term nature. From a risk management perspective, this duration suggests that Jordan’s debt carries a moderate level of interest rate risk long enough to benefit from stable funding conditions, yet short enough to allow periodic refinancing and adaptation to changing market conditions (see Table 2).

In 2009 Jordanian duration debt, using Macaulay’s Duration model, was found to equal 0.091 years, and 0.082 when using the Modified Duration model. Yet when counting the average debt duration, it appeared to equal 3.681. This indicates that, although the individual duration measures appear numerically small due to the mathematical weighting of discounted cash flows, the overall debt portfolio maintained a medium-term maturity structure. Economically, this reflects Jordan’s strategy to balance interest rate risk and refinancing flexibility, ensuring that the debt portfolio remained stable despite global financial uncertainty. The average duration of about 3.7 years suggests that the government’s debt instruments were structured to hedge effectively against sudden changes in interest rates, providing steady debt-servicing conditions and supporting fiscal sustainability. Overall, the 2009 results confirm that Jordan’s debt management policy emphasized risk mitigation through duration control, maintaining a sound and moderately sensitive debt profile (see Table 3).

In 2010, the Jordanian duration debt was found 0.038 years using Macaulay’s Duration model. Applying the Modified Duration model, it equaled 0.035 years, while when counted, the average debt duration appeared to amount to 4.611 for the same year. This result indicates a clear extension in the overall maturity structure of Jordan’s public debt compared with previous years, reflecting a strategic shift toward longer-term borrowing instruments. Economically, the higher average duration signifies that the government aimed to reduce refinancing risk by locking in debt at longer maturities, ensuring greater stability in debt servicing over time. Moreover, the Macaulay and Modified duration values remain low due to their sensitivity to discounting and cash flow timing; the average duration provides a more realistic measure of the portfolio’s exposure to interest rate changes. A duration of around 4.6 years implies moderate responsiveness to interest rate fluctuations, allowing the government to benefit from predictable financing costs while maintaining flexibility in managing public liabilities. Overall, the 2010 duration figures demonstrate that Jordan pursued a prudent debt management policy, strengthening the debt’s role as an effective hedging tool against long-term interest rate volatility and financial uncertainty (see Table 4).

In 2011, using Macaulay’s Duration, Jordanian duration debt equaled 0.088 years, and 0.081 years using the Modified Duration model. However, it occurred that the average debt duration for this year totals 4.267. Economically, an average duration of 4.27 years suggests that the government’s debt instruments were structured to minimize exposure to short-term interest rate fluctuations, thereby enhancing financial stability and predictability in debt servicing. This duration level demonstrates Jordan’s commitment to prudent debt management, using duration as a risk-hedging mechanism to mitigate the impact of interest rate volatility while maintaining sustainable borrowing conditions within a stable fiscal framework (see Table 5).

In 2012, by using Macaulay’s Duration model, the Jordanian Macaulay’s duration was estimated at 0.077 years, while by 0.071 years applying the Modified Duration model, and when reckoning the average duration, it turned out to equal 3.397 years for this year. This result indicates a slight shortening in the overall maturity structure of Jordan’s public debt compared with the previous year, suggesting a strategic adjustment toward more flexible and cost-efficient borrowing. Economically, the reduction in average duration reflects the government’s efforts to balance interest rate risk and refinancing needs, possibly in response to changing market conditions or fiscal pressures. Although the Macaulay and Modified durations remain numerically low due to the discounting effect of near-term cash flows, the average duration provides a more accurate measure of the effective maturity and risk exposure of the debt portfolio. With an average duration of approximately 3.4 years, the portfolio maintained moderate sensitivity to interest rate movements, providing a reasonable hedge against market volatility while preserving liquidity and maintaining refinancing capacity. Overall, the 2012 results illustrate Jordan’s pragmatic approach to debt management, emphasizing risk control and financial stability through the careful calibration of debt maturity and duration (see Table 6).

In 2013, Jordanian duration debt was found to amount to 0.071, using Macaulay’s Duration model, whilst through applying the Modified Duration model, the result was 0.065 years, but when counting the debt’s duration average, the latter turned out to equal 3.299 years. This result indicates a continued moderate decline in the overall maturity profile of public debt compared with the previous year, reflecting a possible government decision to rely more on medium-term instruments amid evolving economic and financial conditions. Economically, the decrease in average duration suggests an effort to enhance flexibility and manage refinancing risk, allowing the government to adjust borrowing costs in response to market changes. The low Macaulay and Modified duration values result from the time-weighting of discounted cash flows, whereas the average duration more accurately represents the actual time horizon of debt obligations. With an average duration of approximately 3.3 years, Jordan’s debt portfolio remained moderately exposed to interest rate fluctuations, ensuring stability in debt servicing while maintaining fiscal adaptability (see Table 7).

In 2014, implementing Macaulay’s Duration model, the Jordanian Macaulay’s duration was determined to amount to 0.104 years. Using the Modified Duration, on the other hand, the result was 0.095 years. Yet, when counting the debt’s duration average, it seemed to amount to 1.748 for the same year. This indicates a significant shortening of the overall debt maturity structure compared with previous years, suggesting a strategic shift toward short- to medium-term instruments. The lower average duration implies reduced interest rate risk exposure but increased refinancing frequency, allowing the government more flexibility in managing debt costs. The discrepancy between the individual and average durations reflects the weighting of cash flows, with the average duration providing a more realistic measure of the portfolio’s effective maturity and risk profile (see Table 8).

In 2015, Jordanian duration debt was found to equal 0.185 years, while 0.169 years when employing the Modified Duration model. When estimating the average duration, it was determined that 2.721 is a suitable estimate for this year. This indicates a moderate increase in the overall maturity structure compared with 2014, reflecting a shift toward longer-term instruments in the debt portfolio. The higher average duration suggests that the government aimed to balance interest rate risk and refinancing needs, providing greater stability in debt servicing. The difference between the individual and average duration highlights the effect of cash flow weighting, with the average duration offering a more accurate representation of the portfolio’s effective maturity (see Table 9).

In 2016, the Jordanian duration debt was found to equal 0.237 years applying Macaulay’s Duration model; using the Modified Duration model, it was found to amount to 0.217 years. However, the average debt duration for the same year appeared to equal 2.099. This resulted in a slight shortening of the overall debt maturity structure compared to the previous year, indicating a government strategy focused on enhancing flexibility and managing refinancing risk. Economically, the lower average duration implies moderate exposure to interest rate fluctuations, allowing the government to maintain stable debt servicing costs while retaining the ability to adjust its debt portfolio to evolving market conditions. The contrast between the individual and average duration highlights the effect of cash flow weighting, with the average duration providing a more realistic reflection of the portfolio’s effective maturity and interest rate sensitivity (see Table 10).

In 2017, by implementing Macaulay’s Duration model, the Jordanian Macaulay’s duration was estimated to be 0.235 years and 0.215 years when using the Modified Duration model, yet when counting the average debt duration, it seemed to equal 2.289 years for this same year (see Table 11).

In 2018, utilizing Macaulay’s Duration model, Jordanian debt duration resulted in 0.371 years, whereas by applying the Modified Duration model the result was 0.339, but when reckoning the average duration, it turned out to equal 2.081 for the same year. This indicates a slight increase in the overall debt maturity compared with 2016, reflecting a gradual extension of the government’s debt portfolio. Economically, the average duration of about 2.3 years suggests that the debt maintained moderate sensitivity to interest rate changes, providing a balance between stable debt servicing and flexibility for refinancing. The low individual Macaulay and Modified durations reflect the weighting of cash flows, whereas the average duration captures the effective maturity and risk exposure of the entire portfolio (see Table 12).

In 2019, by using Macaulay’s Duration model, the Jordanian debt duration was found to equal 0.461 years, and 0.419 when applying the Modified Duration model, but when calculating the average of debt duration, the value equalled 2.629 for the same year. This indicates a moderate extension of the debt portfolio’s effective maturity compared with previous years, reflecting a strategy to balance interest rate risk and refinancing needs. Economically, the average duration of around 2.63 years suggests that the government maintained moderate exposure to interest rate fluctuations, allowing predictable debt servicing while retaining flexibility in managing public liabilities. The low individual Macaulay and Modified durations arise from the weighting of near-term cash flows, whereas the average duration better represents the overall risk profile and maturity structure of the debt portfolio (see Table 13).

In 2020, when operating Macaulay’s Duration model, Jordan’s Macaulay’s duration was found to equal 0.541 years, and it equaled 0.491 years using the model of Modified Duration, but when counting the average of duration, the result of this year was found to equal 2.721. This moderate extension in the debt portfolio’s effective maturity reflects the government’s response to the economic uncertainty caused by the COVID-19 pandemic, which created volatility in global and domestic financial markets. Economically, the higher average duration suggests that Jordan aimed to lock in financing over a slightly longer horizon to reduce refinancing risk during a period of heightened interest rate and market uncertainty. The low Macaulay and Modified durations result from the weighting of near-term cash flows, whereas the average duration provides a more realistic measure of the portfolio’s overall interest rate sensitivity and effective maturity. Overall, the 2020 results indicate that Jordan used duration management as a tool to hedge against pandemic-related financial risks, ensuring stability in debt servicing while maintaining flexibility to respond to evolving economic challenges (see Table 14).

When reckoning the duration of all the years during the period 2008–2020, the following results featured:

Thus, applying Macaulay’s Duration model and the Modified Duration model during the period 2008–2020 the Jordanian debt duration was figured out.

Also using the two models it appeared that the Jordanian duration debt is greater than the Jordanian average duration, in addition to that, using the Modified Duration model showed that Jordanian debt duration is less than the Jordanian average duration.

Through the study that has been presented, the researcher finds that from 2008 to 2020, the Jordanian debt has been constantly increasing. Nonetheless, being a part of the Gross Domestic Product, the Jordanian debt’s actual level has significantly decreased at the period’s beginning, then risen slightly in recent years due to the global financial crisis. Therefore, calculating debts of duration can be used as a risk hedging tool, and also to predict prohibitions because it informs us about the required period, so we can calculate the rate of change in the value of the asset and the change’s percentage in the maturity date, thus hedging the risk of volatility of interest rates. According to the previous results, we find that the Macaulay’s duration using Macaulay’s Duration model equals 2.514 years, and applying the Modified Duration equals 2.293 years. These are economically good indicators for the Jordanian government. Since it is also considered a short period and not a long period, this is a good indicator in terms of hedging the risks of increasing debt and duration debt. The researcher also sees that Jordanian experts must interfere to reduce the debt rate and resort to alternative local sources to minimize Jordan’s fiscal deficit. They should also look for other revenue to resolve the problem. The findings of this study carry important policy implications for public debt management in Jordan. The estimated duration measures provide policymakers with clear indicators of interest rate risk exposure and refinancing horizons, enabling more informed decisions regarding debt maturity structuring. A moderate debt duration, as observed in the study period, suggests that the government can balance cost efficiency with refinancing flexibility. Moreover, duration analysis can be integrated into debt strategy frameworks to support hedging against interest rate volatility, enhance fiscal sustainability, and improve the predictability of debt servicing costs. Accordingly, incorporating duration-based indicators into Jordan’s debt management policies can strengthen risk mitigation and long-term financial stability.