Jordan economic reform programme 'off to strong start', IMF says

Washington-based lender provides Amman with access to about $130 million after completion of first EFF review

The IMF downgraded Jordan's growth projection from 2.6 per cent this year to 2.4 per cent before growth picks up again in 2025. Photo: Alamy

The International Monetary Fund on Monday gave Jordan access to about $130 million after the multilateral lender found Amman to have made progress in its economic reform programme.

The Washington-based lender approved a $1.2 billion Extended Fund Facility (EFF) for Jordan in January to support the government's economic programme following the conclusion of an initial review, the Washington-based lender said.

“The EFF-supported programme is off to a strong start, reflecting the authorities’ strong ownership of the programme,” the IMF said.

The EFF helps provide financial assistance to countries facing serious problems with medium-term balance of payments because of the length of time it takes to address structural weaknesses.

The agreement is designed to support Amman's efforts at placing public debt on a “steady downwards path”, protect social and capital spending and broaden the tax base.

“The authorities remain firmly committed to sound macroeconomic policies and advancing structural reforms, to maintain macro stability, further strengthen economic resilience, and foster stronger, job-rich growth and improved living standards for all Jordanians,” the IMF said.

The IMF downgraded Jordan's growth projection from 2.6 per cent this year to 2.4 per cent before growth picks up again in 2025. The IMF also noted Jordan's inflation rate is low, and that reserve buffers are strong.

“Jordan’s economy continues to show resilience, including in the face of the challenges posed by the Israel–Gaza conflict and the disruptions to trade in the Red Sea,” the IMF said.

Despite this strong performance, “challenges remain”, the multilateral lender said, noting the country's high unemployment rate.

“Importantly, the unsettled regional situation weighs on Jordan’s near-term outlook,” it said.

“Strong international support remains needed to support the authorities’ policy efforts and to help shoulder the cost of hosting a large number of Syrian refugees.”

Government gross debt is projected to dip to 113.7 per cent of Jordan's gross domestic product this year from a downwardly revised 114.1 per cent in 2023.

The IMF said Jordan's fiscal policy remains focused on continuing to reduce public debt while expanding support to vulnerable households, while monetary policy remains focused on maintaining stability and protecting the exchange rate peg.

It also said the war's impact on growth and investment highlights the need to continue and accelerate these reforms.