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IMF says Jordan must push reforms to drive growth

Logo, Person, Man Reuters/Johannes Christo
The extended IMF loan comes amid significant macroeconomic challenges faced by Egypt

The International Monetary Fund said on Wednesday Jordan needed to accelerate structural economic reforms to push growth beyond the average two-to-three percent it has struck in recent years to help it generate more jobs to reduce high unemployment.

“With unemployment still high, and particularly among the youth and women, structural reforms are essential for achieving strong and inclusive growth and creating more jobs,” IMF official Ron van Rooden told reporters.

Growth has to rise to ease high unemployment currently standing at around 22.9 percent, he added.

A 2.6 percent growth rate forecast for this year was still insufficient to improve standards of living in a country with a population of nearly 11 million and annual population growth of around two percent, he said.

The IMF official, who was ending a visit to conduct the sixth review of the country’s IMF-backed program, said Jordan remained firmly on track with key program targets met and progress through prudent monetary and fiscal policies.

“Despite a challenging global and regional environment, Jordan has maintained macroeconomic stability,” van Rooden said.

Jordan’s macroeconomic stability had helped it tap more favorable interest rates from international capital markets than other sovereign countries when it issued last months’ Eurobond worth $1.25 billion, he said.

“We are calling Jordan a success story because they have consistently implemented sound macroeconomic policy, fiscal policy, monetary policy,” he said.

Finance minister Mohamad Al Ississ said the four-year IMF-backed programme, due to end next year, had helped to preserve economic stability in difficult global circumstances.

Inflation was on track to moderate to 2.7 percent in 2023 from earlier projections of 3.8 percent with a tight monetary policy that helped to curb global inflationary pressures, van Rooden said.