IMF gives Jordan access to $131m as reforms continue

Unsplash.com/Moxin Wang

The International Monetary Fund (IMF) will grant Jordan access to $131 million as the country’s economic reform programme remains strong despite it facing a challenging external environment.

The release of the funds remains subject to approval by the IMF’s management and executive board.

“Jordan continues to show resilience and maintain macro-economic stability, despite the headwinds caused by the intensifying conflict in the region,” the fund said after completing the second review of the $1.2 billion extended fund facility (EFF) programme approved in January.

The IMF said that the recent upgrades to Jordan’s credit ratings, the first in over 20 years, underscores the credibility of the authorities’ economic policies.

• UAE-Jordan trade deal targets non-oil growth
• Jordan selects preferred bidder for $3bn water project
• War, oil, safe haven assets and risk premium in the GCC

But as regional conflicts persist and widen, the impact on Jordan’s economy has been more severe than initially expected at the beginning of the reform programme.

Economic growth is expected to reach 2.3 percent in 2024, with domestic demand weakening but offset by a stronger performance in net exports.

Growth is projected to increase marginally to 2.5 percent in 2025. Inflation remains low at 2 percent, supported by the Central Bank of Jordan’s commitment to monetary stability and safeguarding the exchange rate peg.

The financial sector remains healthy and well capitalised, with the current account deficit projected to narrow to 4.4 percent of GDP. This will help to further build the central bank’s reserve buffers, which widen slightly to 4.7 percent of GDP next year.

Jordan’s fiscal policy aims to reduce public debt to 80 percent of GDP by 2028, which will be achieved through gradual fiscal consolidation, including limiting the central government primary deficit to 2 percent of GDP by 2025, the fund said.