Statement by IMF Deputy Managing Director Nemat Shafik at the Conclusion of Her Visit to JordanPress Release No. 13/65
March 6, 2013
Ms. Nemat Shafik, Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today in Amman at the end of her visit to Jordan:
“It has been a pleasure to visit Jordan for the second time as Deputy Managing Director of the IMF. The IMF is supporting Jordan’s national economic program under a 36-month Stand-By Arrangement in the amount of SDR 1.364 billion (about US$2 billion, 800 percent of quota), approved by the Executive Board on August 3, 2012 (see Press Release No. 12/288).
“During this visit, I had very productive meetings with Prime Minister Abdallah Ensour, Speaker of the Upper House Taher Masri, Minister of Finance Suleiman Hafiz, Minister of Energy and Mineral Resources Alaa Batayneh, and other members of the cabinet as well as Governor of the Central Bank of Jordan Ziad Fariz. In these meetings we discussed Jordan’s recent economic performance, the near- and medium-term challenges facing the country, and policies to address these challenges and maintain macroeconomic stability. I also held inspiring discussions with Jordanian women representing different sectors of society, including women working with refugees from Syria.
“Sound macroeconomic policies have helped Jordan navigate through a challenging 2012. The conflict in Syria and related large refugee inflows; high energy and food prices; and lower gas inflows from Egypt, have put pressures on Jordan’s external and fiscal positions. But the authorities have taken decisive steps to address these challenges while protecting the vulnerable parts of the population. Risks to the economic outlook remain, but the improvements in the fiscal and external accounts are encouraging.
“Despite a difficult external environment, Jordan’s economy has been performing well. Growth in 2012 is estimated to have increased to 2.8 percent while inflation has recently eased to 6.7 percent. Higher energy imports led to a widening of the external current account deficit, but that was offset by a stronger capital account. The central government performance was on track and the electricity company was in line with expectations. The Central Bank of Jordan has managed well the temporary pressure on reserves in the fall of 2012. With the receipt of sizeable grants from GCC countries, a successful dollar-denominated domestic treasury bond issuance, and increased preference for dinar denominated deposits, international reserves now stand at a comfortable level.
“We discussed medium-term policies for boosting growth prospects while strengthening fiscal and external positions—key objectives for the authorities’ program. We expect economic performance to be better in 2013. We agreed that near-term efforts should focus on further strengthening Jordan’s fiscal situation in a socially acceptable way, restoring the electricity company’s financial health, and further rebuilding policy buffers. This should be complemented by continued structural reforms aimed at improving the business environment, enhancing transparency, fostering trade, and improving labor-market skills through education and training. These policy actions will help strengthen confidence and maintain macroeconomic and social stability.
“I would like to express my appreciation to the authorities for their hospitality.”