Press Release No. 12/504

Press Release No. 12/504
December 26, 2012

A mission from the International Monetary Fund (IMF) visited Amman during December 3-20 in the context of the first review of the Jordan’s Stand-By Arrangement (SBA). Kristina Kostial, the IMF Mission Chief for Jordan, issued the following statement today:

“Jordan performed well under the program in 2012. The country has faced challenges during the year from the disruption of the flow of natural gas, the ongoing conflict in Syria, and an acceleration of influx of refugees. Combined with higher oil and food prices and a shortfall in grants, this has put further pressure on the country’s economy. Nonetheless, growth is expected to increase slightly to 3 percent compared with 2.6 percent in 2011, while average inflation is expected to be around 5 percent for the year.

“Despite this challenging environment, the authorities have been implementing sound macroeconomic policies aimed at reducing fiscal and external imbalances in a socially acceptable way. The removal of general subsidies on all fuel products except LPG on November 14 was an important step. It reduced costs and risks to the budget from fluctuations in oil prices. Introducing targeted transfers at the same time mitigated the impact of fuel price increases for a large part of the population.

“The authorities and the mission held very constructive discussions about the road ahead and how to overcome the challenges Jordan faces. The authorities have reaffirmed their commitment to continue their program of reforms to keep the fiscal and external balances on a sustainable path. Discussions will continue in early 2013 on designing a comprehensive program for 2013. This program will include specific policy measures that would help Jordan to reach its program objectives and address the key challenges it faces, including the large inflow of Syrian refugees. The IMF is looking forward to continue its dialogue with the authorities and support for the Jordan’s national program of economic reforms.”

For information on the Stand-By Arrangement, please see the following link: http://www.imf.org/external/country/JOR/index.htm