Economy

Jordan to get $131m under IMF’s finance programme

By Pramod Kumar

December 13, 2024, 10:11 AM

The Temple of Hercules in Jordan. Ongoing conflict in the middle east is having a larger impact than initially expected on the country

Jordan will receive $131 million from the International Monetary Fund (IMF) under its $1.2 billion extended fund facility programme.

The four-year programme, approved in January 2024, remains on track, the IMF said in a statement following the completion of a second review.

Jordan’s economy continues to grow amid low inflation, the fund said, adding that the resilience resulted from the sound macro-economic policies, reform progress over the past several years and sizable international support.

However, ongoing conflict in the wider middle east is having a larger impact than initially anticipated, slowing economic growth and affecting government finances.

Growth is projected to moderate to 2.3 percent in 2024, from 2.7 percent in 2023. It is expected to reach 2.5 percent in 2025 before picking up in the following years, assuming a resolution of the conflict and further reform.

“With revenues impacted this year by the effects of the conflict on Jordan’s economy, this year’s budget deficit is contained by careful spending prioritisation,” said Kenji Okamura, acting chair and deputy managing director, IMF.

Risks to the outlook remain high, as the unemployment rate remains at 21 percent.

Inflation will likely remain low at about 2 percent, reflecting the Central Bank of Jordan’s commitment to monetary stability and the exchange rate peg.

Strong and timely donor support remains essential to help Jordan navigate the challenging external environment, host a large number of refugees and meet the development objectives, including addressing the impact of climate change, Okamura said.