Jordan's economy recovering but reforms needed, IMF says

Unemployment particularly high among women and young people, organisation says at conclusion of visit to Amman

A produce market in Amman, on April 5, 2021. AFP

Jordan continues to recover from the impact of the pandemic but authorities need to make fundamental economic and administrative changes to curb high unemployment, the International Monetary Fund said on Wednesday.

“Structural reforms are essential,” the fund said in a statement at the conclusion of a visit by several senior officials to Jordan to conduct the sixth review of the kingdom's economic reform programme, which started in 2020.

The review, which would still need to be approved by the IMF's board, would bring the organisation's total funding for reforms in Jordan to $1.75 billion, up from $1.70 billion in December, when the previous review was conducted.

The IMF, however, pointed out the 22.9 per cent unemployment in the country, which it described as high, “particularly among the youth and women”.

It said “promoting competition, increasing labour market flexibility, and enhancing governance and transparency” were among the fundamental measures that authorities needed to take.

“While progress has been made in these areas, more is needed to create a more dynamic private sector, attract more investment and create job-rich economic growth,” the IMF said.

Jordan's economy is expected to grow by 2.6 per cent in 2023, continuing a “post-pandemic recovery”, the fund said.

The IMF expected inflation to be at a “moderate” 2.7 per cent for 2023, due to “an appropriate monetary policy stance”.

In the medium term, the economy is forecast to grow at 3 per- cent annually, although “uncertainty surrounding the global outlook is high”.

On the public finances front, the fund said a programme to ensure the budget deficit in Jordan “remains firmly on track”, with “a view” to reduce public debt to 80 per cent of gross domestic product by 2028 from current levels of about 110 per cent.

Jordanian Finance Minister Mohammad Al Ississ said that discussions between Jordanian and IMF officials lasted for two weeks.

He told reporters that the talks focused on the “points of strength and any weaknesses” in the kingdom's economy.