## 1. Selected Economic Indicators and Macroeconomic Outlook, 2008–17 ## Source details **Canonical URL:** [1. Selected Economic Indicators and Macroeconomic Outlook, 2008–17](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2012/_cr12119.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2012/_cr12119.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2012/_cr12119.pdf.json) --- ### Background and structural features - Real growth during 2000–09 averaged about 6½ percent. - The economy is highly dependent on commodity imports (oil and grains), tourism receipts, remittances, FDI flows, and external grants. - Chronic unemployment: overall unemployment averaged around 13 percent during 2000–11; unemployment among the young and graduates estimated at around 31 percent at end-2011. - Jordan’s social indicators compare favorably with neighboring Arab states; Human Development Index ranking has been improving. - Authorities have implemented structural reforms to develop the private sector and show a continuing commitment to sound economic policies. ### Key macroeconomic outcomes and strengths - Robust real growth (historically), low inflation environment, and stable exchange rate. - Limited external debt and adequate reserve buffers. - External capital account dominated by private capital flows. - Fiscal imbalances that, with appropriate policy, stabilize debt at sustainable levels. - Well supervised and sound banking system, funded mainly by local deposits. - Region-leading social and development indicators and good quality data and statistical practices. ### Consensus on priorities - Fiscal and external balances sustainability. - Maintain the robustness of the exchange rate peg. - Fight corruption and bolster transparency of public policymaking. - Improve quality of government services (particularly health and education). - Combat poverty through well-targeted transfers and reduce unemployment. - Damp adverse effects of shocks from dependence on imported oil and food. - Boost industry competitiveness, particularly tourism. ### Recent economic developments — 2011 - Real GDP expected to rise by 2½ percent in 2011, following a downturn in 2010; growth driven modestly by mining, finance, and government services. - Headline inflation fell to 4½ percent in 2011; core inflation picked up to around 4½ percent y-o-y. - Unemployment increased to almost 13 percent in 2011. - Overall fiscal deficit increased to about 6 percent of GDP in 2011, mainly due to increased commodity subsidies and other social spending (costing an additional 2⅓ percent of GDP) and a cyclical weakening in domestic revenues. - Budgetary grants of $1.4 billion (5 percent of GDP) were provided by Saudi Arabia during 2011; excluding grants, the overall fiscal balance registered a deficit of around 12 percent of GDP. - Public debt-to-GDP ratio increased to about 64½ percent at end-2011 (including central government borrowing and borrowing on behalf of NERC/own-budget agencies). - External current account deficit widened to 9½ percent of GDP in 2011, driven by increased energy imports and declining remittances and tourism receipts. - International reserves fell by 14 percent to reach $10.7 billion (equivalent to 6⅔ months of imports) at end-2011. - Budgetary financing needs (excluding grants) estimated at $2.84 billion (9.5 percent of GDP) for 2011. - External financing needs (after FDI, new borrowing, other capital flows, and including official transfers) reached $1.0 billion (3.3 percent of GDP). - Central Bank of Jordan tightened monetary stance in July 2011, raising key interest rates by 25 basis points to increase the overnight window rate to 2.25 percent. - Bank private sector credit grew by 9½ percent y-o-y in December 2011. ### Outlook and projections (2012) - Real GDP projected around 2¾ percent in 2012, supported by improved mining and financial services activity and continued growth in GCC countries. - Average inflation projected to pick up to almost 6 percent in 2012 because of planned resumption of pass through of international oil prices to domestic markets. - Current account deficit projected to narrow to 8 percent of GDP in 2012 due to moderation of energy imports and buoyant mining exports (assuming fewer disruptions to gas pipeline flows). ### Major risks and vulnerabilities (Risk Assessment Matrix highlights) - A large and prolonged increase in commodity prices - Likelihood: Staff Assessment: Medium - Expected impact: Staff Assessment: High — would lessen projected narrowing of fiscal and external deficits and increase pressures for current expenditures. - Continued sabotage of the Egyptian natural gas pipeline - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: High — would worsen external current account deficit and increase public debt. - Worsening unrest and civil war in neighboring countries - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: High — would reduce remittances, tourism, FDI; possible capital outflows; slower growth. - Fiscal slippage - Likelihood: Staff Assessment: Medium - Expected impact: Staff Assessment: Medium — failure to implement consolidation would exacerbate debt sustainability concerns. - A spike in domestic inflation - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: Medium — subsidy removal may raise domestic commodity prices, raising headline inflation and wage demands. - Direct effects of Eurozone crisis - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: Low to Medium — limited direct exposure, but possible indirect effects via regional oil exporters. ### Authorities’ view - Authorities agreed with staff about outlook and risks, particularly frequent disruption of natural gas flows from Egypt as a serious macroeconomic risk. - Short-term alternatives to natural gas are costly; medium-term options include new pipelines and ship-based liquefied natural gas imports. ### Policy priorities — Managing the economy in 2012 - Immediate objective: reduce fiscal and external imbalances to preserve macroeconomic stability. - Near-term and medium-term emphasis: - Focus on near-term fiscal consolidation plans and a clear medium-term strategy to strengthen the fiscal position. - Maintain an appropriate monetary stance. - Adopt measures to promote inclusive growth and employment. ### Fiscal consolidation — 2012 budget and staff assessment - Parliamentary-approved 2012 budget envisages considerable fiscal consolidation by: - Raising domestic revenue (including by removing tax exemptions, revamping property transfer fees, and higher tax rates on luxury goods). - Containing current spending (including freezing public sector hiring, reductions in operational costs of Ministries). - Reforming universal subsidies for gasoline and diesel and implementing targeted transfers to alleviate higher fuel costs associated with phasing out fuel subsidies. - The authorities’ budget measures would lower the overall deficit by about 1.5 percent of GDP in 2012. - If the budget is fully implemented, the 2012 overall deficit is expected to narrow by about 1 percent of GDP relative to the 2011 outturn, reaching 5¼ percent of GDP. - Fiscal measures in the 2012 budget (Percent of GDP): - Revenue 1.4 - Tax Measures 1.2 - Removing Exemptions 0.9 - Tax on Luxury Goods 0.3 - Non Tax Revenue 0.2 - Expenditure -0.1 - Civil Service Reform 0.4 - Pension Reform 0.3 - Fuel Price Subsidy Reform -0.7 - Of which: Subsidy cuts -1.0 - Targeted Transfers 0.2 - Change in Overall Deficit 1.5 - Source: Authorities and IMF staff estimates. Figures may not add up due to rounding. ### Fiscal position, measures, and risks - Overall fiscal developments: - Fiscal deficit (excluding grants) is projected to be reduced by 4 percentage points to reach 6½ percent of potential GDP (Box 3). - Public debt-to-GDP ratio would rise to 65½ percent by end-2012 given fiscal imbalances and likely public borrowing for own-budget entities. - Failure to implement the fiscal consolidation envisaged in the 2012 budget would place upward pressure on inflation, increase external imbalances, and raise domestic borrowing costs. - Authorities’ stance and staff views: - Authorities emphasize that implementing the budget is essential to rein in the fiscal deficit and demonstrate commitment to fiscal sustainability given Jordan’s already-high public debt and debt servicing costs. - Mission welcomed authorities’ revenue-raising efforts, supporting elimination of inefficient tax exemptions and privileges, broadening tax coverage (including revamped property taxes) to better target wealthy taxpayers. - Authorities concurred on the need for a freeze in the size of the civil service (depending on grant flows) to create fiscal space for increased capital spending above historic-low levels. - The 2012 budget reinstates the automatic fuel pricing mechanism to remove fiscal vulnerability to future oil price movements. - Universal commodity subsidies are to be replaced by well-targeted compensatory transfers (could take the form of cash transfers to low-income households). - Medium-term fiscal objective in the 2012 budget: narrowing the overall deficit to about 3½ percent of GDP by 2014. - Medium-term fiscal assessment: - Staff view: current assumptions rely heavily on real GDP growth for deficit reduction beyond 2012; this will not be sufficient to attain medium-term budget goal until 2017. - Recommendation: gear fiscal policy toward a more ambitious medium-term target to provide cushion for unforeseen budget demands. - Authorities are considering measures and expect a return in investor confidence to aid pickup in activity and net revenues. ### Financing needs, reserves, and sustainability - 2012 financing and reserve outlook: - Fiscal financing needs (excluding grants) are expected to reach $2.86 billion (9.1 percent of GDP), to be met by domestic banks assuming full implementation of the budget. - External financing needs (after FDI, new borrowing, other capital flows, and including official transfers), to be met by reserve drawdown, are expected to reach $0.9 billion (2.7 percent of GDP). - Foreign reserves are expected to decline to about 6 months of imports at end-2012. - Sustainability concerns and external support: - Such a financing strategy is unlikely to be sustainable over the medium term without additional external support or an enhanced pace of fiscal consolidation. - Mission discussed plans to meet financing needs, including potential financial support from members of the G8-Deauville Partnership, a Development Policy Loan with the World Bank, and arrangements with other IFIs and donors. - Grants and external income: - Over the last ten years, grants have averaged around 5½ percent of GDP, generally sourced from oil-exporting GCC countries and moving in line with oil prices. ### Monetary and exchange rate policy: preserving reserves and containing inflation - Policy priorities: - A sufficiently large international reserve buffer is needed as insurance against unexpected shocks given high commodity-import prices and regional political uncertainties. - Further tightening of monetary conditions is appropriate to sustain attractiveness of dinar-denominated assets and contain inflation expectations. - Monetary and fiscal policy coordination is essential given the sizeable fiscal deficit in 2012. - Available monetary tools under the exchange rate peg: - Allow dinar interest rate differentials against the U.S. dollar to widen by: - raising the policy (overnight window) rate; - increasing reserve requirements; - resumption of issuance of certificates of deposit to soak up excess liquidity. - Exchange rate peg and real effective exchange rate: - The peg of the Jordanian dinar to the U.S. dollar anchors inflation expectations and macro stability. - Real effective exchange rate experienced a modest appreciation of 2½ percent between December 2009 and November 2011; mission’s analysis suggests the dinar remains broadly aligned with medium-term fundamentals. - Recent monetary actions and recommendations: - On February 5, 2012, the Central Bank of Jordan raised key interest rates by 50 basis points, elevating the overnight window rate to 2.75 percent. - Staff argues Jordan should strengthen international reserve buffers; staff expects the external current account deficit to narrow in 2012 as exports, tourism receipts, and remittances stabilize and FDI rebounds, while authorities expected a smaller narrowing due to higher anticipated fuel import costs. ### Financial sector: regulation, supervision, and resilience - Overall soundness: - Jordanian banking system remains sound; CBJ exercises prudent regulation and supervision. - JD loan/deposit ratio near 73 percent at December 2011. - Key indicators and risks: - Macro-prudential indicators: banks remain profitable and well capitalized; deposits are largely JD-denominated and remain the major funding base; liquidity ratios and provisioning remain high. - Non-performing loans increased slightly to 8½ percent at mid-2011. - Private sector credit growth at end-December 2011 stood at 9.6 percent compared with 7.2 percent in 2010. - Risk: potential increase in non-performing loans and provisioning requirements over the medium term as growth likely remains below trend to 2015. - Measures to enhance supervision and infrastructure: - CBJ actions in 2011 toward Basel II and FSAP recommendations: - Supervisory reviews of bank ICAAPs and semi-annual monitoring of financial soundness indicators. - Steps toward an automated data collection system expected operational by end-2012 to improve off-site monitoring and enable a statistical-based early warning system. - Passage of the Credit Information Law and associated by-laws (in August 2011) to enable a credit bureau. - Issuance of a circular in October 2011 requiring licensed banks to provide details (by mid-2012) on the impact of implementing Basel III. - Staff view: monetary authorities have implemented almost all recommendations in the 2008 FSAP Update. - Scheme renewals and market development: - Most CBJ-administered lending schemes (SME lending scheme and fixed rate 5-year credit facility to industry) were not renewed early in 2012 due to low demand; low-income housing lending scheme due to expire in May, 2012. - Framework for issuance of Islamic sukuk is progressing slowly; draft Sukuk Law awaits parliamentary approval and legal issues remain to be resolved. - AML/CFT progress: - Jordan recognized in November 2010 as the first MENA country in compliance with FATF targeted review recommendations. - AML/CFT supervision strengthened through amendments to AML/CFT Law and revised instructions; Jordanian AML/CFT Unit requested IMF technical assistance for further assessment. ### Medium-term outlook and policy challenges - Primary medium-term objectives: - Reduce vulnerabilities by reining in large fiscal and current account deficits and dependence on external grants. - Create jobs and provide social protection by achieving faster and more inclusive growth. - Policy actions needed: - Maintain a stable macroeconomic environment. - Improve business climate and governance. - Reduce generalized subsidies and build targeted transfers and social safety nets. - Enhance trade openness and accelerate labor market reforms. - Specific recommendations and planned reforms: - Use the new Investment Law (passed June 2011) and Jordan Investment Board as a one-stop-shop to streamline licensing and registration. - Wind down universal subsidies and replace with better targeted subsidies/transfers to free up funds for capital spending and social spending. - Limit risks of mega-projects and avoid issuing debt guarantees for borrowing by public agencies in connection with prospective mega-projects; donor financing and concessional funding suggested as alternatives. - Passage of the PPP Law in June 2011 seen as important for boosting infrastructure investment. - Implement National Trade Strategy and National Tourism Strategy to enhance trade, tourism, and attract FDI. - Continue strengthening fiscal institutions: Treasury Single Account, Government Financial Management Information System, three-year medium-term framework, internal audit, enhanced Audit Bureau, and merge/reduce own-budget public agencies (62 agencies at end-2011). - Encourage good governance via strengthened Audit Bureau, Ombudsman Bureau (established 2009), and Anti-Corruption Commission (under revised Anti-Corruption Law of 2011). - Support poverty reduction: Poverty Analysis Report (2010) based on 2008 survey indicates some 13⅓ percent of the population had incomes below the poverty line; authorities drafting a new Poverty Reduction Strategy for 2012–15 and plan better targeting of transfers and capacity-building activities, including micro-credit in poverty pockets. ### Inclusive and sustainable growth to boost employment - Context and challenge: - Jordan has experienced periods of relatively strong growth that created employment for nationals and expatriates, yet the unemployment rate has for the last few years been fixed at about 13 percent. - Absorbing the 2010 unemployed and about 60,000 new labor market entrants anticipated each year would require annual real GDP growth of around 9⅓ percent, which is about 6 percentage points higher than current medium-term projections. - Annual growth of about 4½ percent (near potential) is insufficient to absorb anticipated new labor market entrants based on past labor market trends. - Policy priorities and recommended components of a growth and employment strategy: - Increase capital spending (within constraints of fiscal sustainability) and improve project evaluation and appraisal. - Enhance linkages with the GCC and examine impediments to accessing the GCC market. - Support productivity improvements in manufacturing through skill enhancement and vocational education. - Broaden corporate financing sources, including access to longer-maturity financing and development of the corporate bond market (including sukuk corporate bonds). - Improve labor market functioning by reducing rigidities, decreasing regulatory and tax burdens, addressing skill mismatches, and encouraging higher labor force participation by Jordanians. - Continue developing labor-intensive SME access to finance via the donor-supported National SME Program and introduce a credit information bureau. - Simplify business registration and regulation procedures to foster a more competitive business environment, especially for SMEs. - Ensure any revisions to public sector compensation or minimum wages do not distort incentives for private sector employment. - Authorities’ initiatives to foster employment: - Enhanced SME formation through the National SME Program. - Facilitation of job creation in governorates via equity investment through the Governorates’ Investment Fund. - The new National Employment Strategy to expand vocational training and better align skills with emerging employment opportunities. - Authorities highlighted tourism, mineral exports, manufacturing, information communication technology, final consumer goods production, and eco- and family-oriented tourism as areas with employment potential. - Key statistics: - Unemployment rate: about 13 percent. - Anticipated new labor market entrants each year: around 60,000. - Required annual real GDP growth to absorb 2010 unemployed and new entrants: around 9⅓ percent. - Projected near-potential annual growth cited as insufficient: about 4½ percent. - Note: Data for Jordan minimum wage does not reflect the end-2011 minimum wage increase to $268. ### Staff appraisal — macroeconomic assessment and policy guidance - Recent shocks and outlook: - Jordan has faced repeated sabotage of energy infrastructure, slowed tourism and remittances, regional political tensions, rising sovereign financing costs, and a precipitous decline in the terms of trade in 2010–11 from high import prices for oil and food. - Immediate challenge is to preserve macroeconomic stability while enhancing inclusive growth. - Fiscal policy: - Staff supports the fiscal consolidation contained in the 2012 Budget; staff believes the decline in the overall deficit of about 1 percentage point of GDP in the current year is appropriate and achievable. - Implementation of fiscal plans, plus borrowing to cover sabotage-induced additional fuel products, would engender a small rise in the debt-to-GDP ratio in 2012 (to about 65½ percent of GDP). - Authorities have approved a three-year fiscal reform agenda combining tax reforms, further subsidy reforms, moderation of public sector wage bill growth, prioritization of capital spending, and improvements in tax administration and public sector financial management. - Monetary and exchange-rate policy: - Monetary policy should aim at containing inflationary pressures and supporting an adequate level of reserves. - Given rising regional and emerging market sovereign risk premia, a tightening of monetary conditions is appropriate to sustain attractiveness of dinar-denominated assets and contain inflation expectations. - The dinar’s peg to the U.S. dollar remains the keystone of financial stability and helps anchor inflation expectations; staff analysis indicates the dinar remains broadly in line with its medium-term fundamentals. - Financial sector resilience: - The Jordanian banking system is conservatively managed and effectively supervised, yielding strong macroprudential indicators and resilience to shocks. - Monetary authorities have implemented Basel II regulations and Jordanian banks are progressing toward major components of Basel III regarding capital adequacy and liquidity. - With rising private sector credit growth and slow economic growth, non-performing loans and loan provisioning should continue to be closely monitored. - Staff welcomes further enhancements to Jordan’s AML/CFT framework. - Structural reform priorities reiterated: - Tackling infrastructure bottlenecks through investment and structural reforms. - Improving the business climate and efficiency of labor markets, including reducing labor market rigidities and enhanced vocational training to reduce skill mismatches. ### Proposed follow-up - Next Article IV consultation proposed on the standard 12-month cycle. ### Box 4. Exchange Rate Assessment — key conclusions - Trade-weighted NEER and REER indicate a modest appreciation relative to end-2009 values, ranging from 0 to 3 percent. - Exports of goods and services estimated to have grown by about 11 percent on average over 2007–11. - Tourism receipts account for about one quarter of exports of goods and services. - CGER-based methodologies do not yield evidence of exchange rate misalignment for the medium term (2017). - Macroeconomic balance and equilibrium REER approaches suggest the exchange rate is broadly in equilibrium (overvalued by between 2.2 and 2.5 percent). - External sustainability approach points to a small undervaluation (by 4.6 percent). - On average, the actual REER is calculated as undervalued by 1½ percent vis-à-vis the equilibrium REER. - Fund staff estimate Jordan’s equilibrium current account deficit under current policies at around 6 percent of GDP. - Jordan’s projected medium-term (2017) deficit of 4½ percent of GDP is within one standard deviation of the estimated current account norm. - Conclusion: little evidence of significant real exchange rate misalignment over the medium term; external positions broadly sustainable. ### Box 7. The National Aid Fund — summary - NAF is the primary agency responsible for distributing cash assistance in Jordan; established in 1986. - By the late 1990s, NAF emerged as the single most comprehensive state-funded social safety net. - In 2010: - NAF’s budget amounted to more than JD 78 million (0.4 percent of GDP), with about 88,000 beneficiaries (1.4 percent of the population). - RFAP expenditure: over JD 74 million with 73,000 beneficiaries; RFAP accounts for about 95 percent of the total NAF budget. - NAF programs (5 main programs): Recurring Financial Aid Program (RFAP); Care for the Handicapped Program; Emergency Financial Aid Program; Physical Rehabilitation Program; Vocational Training and Rehabilitation Program. - Eligibility conditioned on Jordanian nationality, permanent residence, and household monthly income below a specified threshold. ### Annex 1. Public Debt Sustainability Analysis — selected projections and scenarios - Baseline central government debt including government guarantees (debt-to-GDP): - 2007: 67.6 - 2008: 54.9 - 2009: 57.1 - 2010: 61.1 - 2011: 64.6 - 2012: 65.5 - 2013: 65.4 - 2014: 64.4 - 2015: 63.7 - 2016: 62.9 - 2017: 62.1 - Foreign-currency denominated share of central government debt (percent of GDP), 2007–2017: - 2007: 43.3; 2008: 23.4; 2009: 22.9; 2010: 24.6; 2011: 21.6; 2012: 21.1; 2013: 19.9; 2014: 18.9; 2015: 18.0; 2016: 17.2; 2017: 15.8 - Change in central government debt (percent of GDP), 2007–2017: - 2007: -1.2; 2008: -12.7; 2009: 2.3; 2010: 4.0; 2011: 3.4; 2012: 0.9; 2013: -0.1; 2014: -1.0; 2015: -0.7; 2016: -0.8; 2017: -0.8 - Primary deficit (percent of GDP), 2007–2017: - 2007: 2.5; 2008: 3.1; 2009: 6.6; 2010: 3.5; 2011: 4.0; 2012: 2.7; 2013: 2.2; 2014: 1.9; 2015: 1.4; 2016: 0.9; 2017: 0.4 - Gross financing need (percent of GDP): - 2007: 8.3; 2008: 8.1; 2009: 10.3; 2010: 7.0; 2011: 7.6; 2012: 6.7; 2013: 6.3; 2014: 6.0; 2015: 5.5; 2016: 5.0; 2017: 4.6 - Scenario highlights: - Contingent liabilities shock: a 10 percent of GDP increase in the debt ratio in 2012 would keep the debt path about 9–10 percentage points above baseline throughout the projection period. - Exchange rate shock: a 30 percent real exchange rate depreciation would increase the debt-to-GDP ratio by around 11 percentage points relative to the baseline in 2012. - No policy change (constant primary balance at 2011 level of 4 percent of GDP): debt ratio would grow to about 68 percent by 2017. - Scenario with 20 percent temporary (2012-13) shock to FDI, remittances and tourism receipts: debt series peaking at 86.5 (2013) and declining to 79.3 (2017). - Scenario with disruptions to natural gas supplies in 2012 similar to 2011: debt series 68.5 (2012), 71.1 (2013), 69.9 (2014), 68.9 (2015), 67.8 (2016), 66.8 (2017). - Selected macro assumptions (real GDP growth, percent): - 2007: 8.2; 2008: 7.2; 2009: 5.5; 2010: 2.3; 2011: 2.5; 2012: 6.0; 2013: 2.4; 2014: 2.7; 2015: 3.0; 2016: 3.3; 2017: 3.7 - Inflation rate (GDP deflator, percent): - 2007: 5.1; 2008: 19.9; 2009: 2.8; 2010: 8.4; 2011: 8.0; 2012: 6.3; 2013: 5.8; 2014: 4.1; 2015: 3.6; 2016: 3.1; 2017: 3.0 ### Latest data and short-term indicators (selected exact figures) - GDP growth and inflation: - Real GDP at market prices: 5.5 (2009), 2.3 (2010), 2.5 (2011), 2.8 (2012). - Consumer price index (average): -0.7 (2009), 5.0 (2010), 4.4 (2011), 5.9 (2012). - Unemployment rate (percent): 12.9 (2009), 12.5 (2010), 12.9 (2011). - Public finance (percent of GDP): - Central government revenue and grants: 26.4 (2009), 24.9 (2010), 26.1 (2011), 25.8 (2012). - Of which: grants: 2.0 (2009), 2.1 (2010), 5.9 (2011), 3.9 (2012). - Central government expenditure and net lending: 35.4 (2009), 30.4 (2010), 32.1 (2011), 31.0 (2012). - Central government overall fiscal balance including grants: -8.9 (2009), -5.6 (2010), -6.0 (2011), -5.2 (2012). - Money and credit: - Broad money: 9.3 (2009), 11.5 (2010), 8.1 (2011), 7.0 (2012). - Credit to private sector: 0.5 (2009), 7.2 (2010), 9.6 (2011), 13.2 (2012). - Reserves and liquidity indicators: - Gross usable international reserves ($ millions): 11,093 (2009), 12,449 (2010), 10,737 (2011), 9,776 (2012). - In months of prospective import cover: 7.8 (2009), 7.7 (2010), 6.6 (2011), 5.9 (2012). - Relative to short-term debt by remaining maturity: 5.2 (2009), 5.3 (2010), 7.5 (2011), 8.8 (2012). - External position (selected): - Current account balance (after grants), percent of GDP: -4.9 (2009), -5.6 (2010), -9.5 (2011), -7.9 (2012). - Exports, f.o.b. ($ billions): 6.4 (2009), 7.0 (2010), 8.0 (2011), 8.9 (2012). - Imports, f.o.b. ($ billions): 12.7 (2009), 13.8 (2010), 16.1 (2011), 16.0 (2012). - International reserves developments: - Reserves fell by almost US$1.1 billion (10.6 percent) compared to end-December 2011, to reach US$9.6 billion (about 5.6 months of import cover) by end-March 2012. - Gross usable international reserves (table): 11,093 (2009), 12,449 (2010), 10,737 (2011), 9,776 (2012). - In months of prospective import cover (table): 7.8 (2009), 7.7 (2010), 6.6 (2011), 5.9 (2012). ### Electricity and energy issues - Since the sabotage of the Arab Gas Pipeline on the Sinai Peninsula on February 5, 2012—the thirteenth time since January 2011—there has been no flow of natural gas from Egypt to Jordan. - Authorities raised electricity prices for large consumers on February 1 (2012); revised electricity pricing schedule withdrawn on March 13 (2012) due to customer complaints about billing irregularities. - A committee of inquiry will recommend a revised pricing schedule that progressively increases prices for higher consumption and entails a higher average price for electricity consumers. - Increased government borrowing on behalf of the National Electric Power Company to cover costly imported fuel oil used during interrupted natural gas supply contributed to higher public debt. ### Outreach and technical assistance - CBJ and IMF co-hosted a Research Workshop at mission conclusion; IMF staff delivered presentations on optimal reserves, unemployment, current account sustainability, and commodity subsidies. - IMF staff conducted a training course on DSGE modeling for CBJ Research Department. - Technical assistance highlights (2002–12) include pension reform, GST reform, macrofiscal capacity and treasury single account, revenue administration reform, public financial management, FSAP and FSAP update, debt management strategy, implementation of Basel II, credit bureau regulation development, and statistical assistance on national accounts and BOP. ### Executive Board assessment and recommended policy priorities - Commended authorities’ track record of prudent macroeconomic management. - Recommended policy priorities: - Implement comprehensive medium-term strategy to restore fiscal buffers and reduce public debt, including enhanced tax administration and fuel subsidy reforms. - Continue fiscal tightening consistent with the 2012 budget and the authorities’ three-year fiscal reform agenda. - Safeguard the exchange rate peg; scope for further tightening of monetary stance to contain inflation risks and maintain adequate international reserve buffer. - Maintain vigilance in banking regulation and supervision; address rising non-performing loans if they materialize. - Promote inclusive growth by improving investment climate and governance, addressing labor market rigidities, resolving skill mismatches, and tackling infrastructure bottlenecks. *Source: JORDAN 2012 ARTICLE IV REPORT — Selected Economic Indicators and Macroeconomic Outlook, 2008–17 (IMF Country Report excerpt, _cr12119)._ * ### 1. Selected Economic Indicators and Macroeconomic Outlook, 2008–17 ______________________ 34 ### 1. Selected Economic Indicators and Macroeconomic Outlook, 2008–17 ### Background and structural features - Real growth during 2000–09 averaged about 6½ percent. - The economy is highly dependent on commodity imports (oil and grains), tourism receipts, remittances, FDI flows, and external grants. - Chronic unemployment: overall unemployment averaged around 13 percent during 2000–11; unemployment among the young and graduates estimated at around 31 percent at end-2011. - Jordan’s social indicators compare favorably with neighboring Arab states; Human Development Index ranking has been improving. - Authorities have implemented structural reforms to develop the private sector and show a continuing commitment to sound economic policies. ### Key macroeconomic outcomes and strengths (as described) - Robust real growth (historically), low inflation environment, and stable exchange rate. - Limited external debt and adequate reserve buffers. - External capital account dominated by private capital flows. - Fiscal imbalances that, with appropriate policy, stabilize debt at sustainable levels. - Well supervised and sound banking system, funded mainly by local deposits. - Region-leading social and development indicators and good quality data and statistical practices. ### Consensus on priorities - Fiscal and external balances sustainability. - Maintain the robustness of the exchange rate peg. - Fight corruption and bolster transparency of public policymaking. - Improve quality of government services (particularly health and education). - Combat poverty through well-targeted transfers and reduce unemployment. - Damp adverse effects of shocks from dependence on imported oil and food. - Boost industry competitiveness, particularly tourism. ### Recent economic developments — 2011 (A challenging year) - Real GDP expected to rise by 2½ percent in 2011, following a downturn in 2010; growth driven modestly by mining, finance, and government services. - Headline inflation fell to 4½ percent in 2011; core inflation picked up to around 4½ percent y-o-y. - Unemployment increased to almost 13 percent in 2011; expected to continue to rise given muted growth prospects. - Overall fiscal deficit increased to about 6 percent of GDP in 2011, mainly due to increased commodity subsidies and other social spending (costing an additional 2⅓ percent of GDP) and a cyclical weakening in domestic revenues. - Budgetary grants of $1.4 billion (5 percent of GDP) were provided by Saudi Arabia during 2011; excluding grants, the overall fiscal balance registered a deficit of around 12 percent of GDP. - Public debt-to-GDP ratio increased to about 64½ percent at end-2011 (including central government borrowing and borrowing on behalf of NERC/own-budget agencies). - External current account deficit widened to 9½ percent of GDP in 2011, driven by increased energy imports and declining remittances and tourism receipts. - International reserves fell by 14 percent to reach $10.7 billion (equivalent to 6⅔ months of imports) at end-2011. - Budgetary financing needs (excluding grants) estimated at $2.84 billion (9.5 percent of GDP) for 2011. - External financing needs (after FDI, new borrowing, other capital flows, and including official transfers) reached $1.0 billion (3.3 percent of GDP). - Central Bank of Jordan tightened monetary stance in July 2011, raising key interest rates by 25 basis points to increase the overnight window rate to 2.25 percent. - Bank private sector credit grew by 9½ percent y-o-y in December 2011. ### Outlook and projections (2012) - Real GDP projected around 2¾ percent in 2012, supported by improved mining and financial services activity and continued growth in GCC countries. - Average inflation projected to pick up to almost 6 percent in 2012 because of planned resumption of pass through of international oil prices to domestic markets. - Current account deficit projected to narrow to 8 percent of GDP in 2012 due to moderation of energy imports and buoyant mining exports (assuming fewer disruptions to gas pipeline flows). ### Major risks and vulnerabilities (Risk Assessment Matrix highlights) - A large and prolonged increase in commodity prices - Likelihood: Staff Assessment: Medium - Expected impact: Staff Assessment: High — would lessen projected narrowing of fiscal and external deficits and increase pressures for current expenditures. - Continued sabotage of the Egyptian natural gas pipeline - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: High — would worsen external current account deficit and increase public debt. - Worsening unrest and civil war in neighboring countries - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: High — would reduce remittances, tourism, FDI; possible capital outflows; slower growth. - Fiscal slippage - Likelihood: Staff Assessment: Medium - Expected impact: Staff Assessment: Medium — failure to implement consolidation would exacerbate debt sustainability concerns. - A spike in domestic inflation - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: Medium — subsidy removal may raise domestic commodity prices, raising headline inflation and wage demands. - Direct effects of Eurozone crisis - Likelihood: Staff Assessment: Medium to High - Expected impact: Staff Assessment: Low to Medium — limited direct exposure, but possible indirect effects via regional oil exporters. ### Authorities’ view - Authorities agreed with staff about outlook and risks, particularly frequent disruption of natural gas flows from Egypt as a serious macroeconomic risk. - Short-term alternatives to natural gas are costly; medium-term options include new pipelines and ship-based liquefied natural gas imports. ### Policy priorities — Managing the economy in 2012 - Immediate objective: reduce fiscal and external imbalances to preserve macroeconomic stability. - Near-term and medium-term emphasis: - Focus on near-term fiscal consolidation plans and a clear medium-term strategy to strengthen the fiscal position. - Maintain an appropriate monetary stance. - Adopt measures to promote inclusive growth and employment. ### Fiscal consolidation — 2012 budget and staff assessment - Parliamentary-approved 2012 budget envisages considerable fiscal consolidation by: - Raising domestic revenue (including by removing tax exemptions, revamping property transfer fees, and higher tax rates on luxury goods). - Containing current spending (including freezing public sector hiring, reductions in operational costs of Ministries). - Reforming universal subsidies for gasoline and diesel and implementing targeted transfers to alleviate higher fuel costs associated with phasing out fuel subsidies. - The authorities’ budget measures would lower the overall deficit by about 1.5 percent of GDP in 2012 (Text Table, as described). - Staff supports authorities’ fiscal consolidation plans. - If the budget is fully implemented, the 2012 overall deficit is expected to narrow by about 1 percent of GDP relative to the 2011 outturn, reaching 5¼ percent of GDP. *Source: JORDAN 2012 ARTICLE IV REPORT — Selected Economic Indicators and Macroeconomic Outlook, 2008–17* ### 1.6 percent of GDP in 2011 to 2.7 percent in 2012, ### _cr12119 - 1.6 percent of GDP in 2011 to 2.7 percent in 2012, ### Fiscal position, measures, and risks - Overall fiscal developments: - Fiscal deficit (excluding grants) is projected to be reduced by 4 percentage points to reach 6½ percent of potential GDP (Box 3). - Public debt-to-GDP ratio would rise to 65½ percent by end-2012 given fiscal imbalances and likely public borrowing for own-budget entities. - Failure to implement the fiscal consolidation envisaged in the 2012 budget would place upward pressure on inflation, increase external imbalances, and raise domestic borrowing costs. - Authorities’ stance and staff views: - Authorities emphasize that implementing the budget is essential to rein in the fiscal deficit and demonstrate commitment to fiscal sustainability given Jordan’s already-high public debt and debt servicing costs. - Mission welcomed authorities’ revenue-raising efforts, supporting elimination of inefficient tax exemptions and privileges, broadening tax coverage (including revamped property taxes) to better target wealthy taxpayers. - Authorities concurred on the need for a freeze in the size of the civil service (depending on grant flows) to create fiscal space for increased capital spending above historic-low levels. - The 2012 budget reinstates the automatic fuel pricing mechanism to remove fiscal vulnerability to future oil price movements. - Universal commodity subsidies are to be replaced by well-targeted compensatory transfers (could take the form of cash transfers to low-income households). - Medium-term fiscal objective in the 2012 budget: narrowing the overall deficit to about 3½ percent of GDP by 2014. - Fiscal measures in the 2012 budget (Percent of GDP): - Revenue 1.4 - Tax Measures 1.2 - Removing Exemptions 0.9 - Tax on Luxury Goods 0.3 - Non Tax Revenue 0.2 - Expenditure -0.1 - Civil Service Reform 0.4 - Pension Reform 0.3 - Fuel Price Subsidy Reform -0.7 - Of which: Subsidy cuts -1.0 - Targeted Transfers 0.2 - Change in Overall Deficit 1.5 - Source: Authorities and IMF staff estimates. Figures may not add up due to rounding. - Medium-term fiscal assessment: - Staff view: current assumptions rely heavily on real GDP growth for deficit reduction beyond 2012; this will not be sufficient to attain medium-term budget goal until 2017. - Recommendation: gear fiscal policy toward a more ambitious medium-term target to provide cushion for unforeseen budget demands. - Authorities are considering measures and expect a return in investor confidence to aid pickup in activity and net revenues. ### Financing needs, reserves, and sustainability - 2012 financing and reserve outlook: - Fiscal financing needs (excluding grants) are expected to reach $2.86 billion (9.1 percent of GDP), to be met by domestic banks assuming full implementation of the budget. - External financing needs (after FDI, new borrowing, other capital flows, and including official transfers), to be met by reserve drawdown, are expected to reach $0.9 billion (2.7 percent of GDP). - Foreign reserves are expected to decline to about 6 months of imports at end-2012. - Sustainability concerns and external support: - Such a financing strategy is unlikely to be sustainable over the medium term without additional external support or an enhanced pace of fiscal consolidation. - Mission discussed plans to meet financing needs, including potential financial support from members of the G8-Deauville Partnership, a Development Policy Loan with the World Bank, and arrangements with other IFIs and donors. - Grants and external income: - Over the last ten years, grants have averaged around 5½ percent of GDP, generally sourced from oil-exporting GCC countries and moving in line with oil prices. ### Monetary and exchange rate policy: preserving reserves and containing inflation - Policy priorities: - A sufficiently large international reserve buffer is needed as insurance against unexpected shocks given high commodity-import prices and regional political uncertainties. - Further tightening of monetary conditions is appropriate to sustain attractiveness of dinar-denominated assets and contain inflation expectations. - Monetary and fiscal policy coordination is essential given the sizeable fiscal deficit in 2012. - Available monetary tools under the exchange rate peg: - Allow dinar interest rate differentials against the U.S. dollar to widen by: - raising the policy (overnight window) rate; - increasing reserve requirements; - resumption of issuance of certificates of deposit to soak up excess liquidity. - Exchange rate peg and real effective exchange rate: - The peg of the Jordanian dinar to the U.S. dollar anchors inflation expectations and macro stability. - Real effective exchange rate experienced a modest appreciation of 2½ percent between December 2009 and November 2011; mission’s analysis suggests the dinar remains broadly aligned with medium-term fundamentals. - Recent monetary actions and recommendations: - Authorities agree that monetary stance should be tightened to increase attractiveness of dinar assets, reverse reserve losses, and combat rising inflation expectations. - On February 5, 2012, the Central Bank of Jordan raised key interest rates by 50 basis points, elevating the overnight window rate to 2.75 percent. - Staff argues Jordan should strengthen international reserve buffers; staff expects the external current account deficit to narrow in 2012 as exports, tourism receipts, and remittances stabilize and FDI rebounds, while authorities expected a smaller narrowing due to higher anticipated fuel import costs. ### Financial sector: regulation, supervision, and resilience - Overall soundness: - Jordanian banking system remains sound; CBJ exercises prudent regulation and supervision. - JD loan/deposit ratio near 73 percent at December 2011. - Key indicators and risks: - Macro-prudential indicators: banks remain profitable and well capitalized; deposits are largely JD-denominated and remain the major funding base; liquidity ratios and provisioning remain high. - Non-performing loans increased slightly to 8½ percent at mid-2011. - Private sector credit growth at end-December 2011 stood at 9.6 percent compared with 7.2 percent in 2010. - Risk: potential increase in non-performing loans and provisioning requirements over the medium term as growth likely remains below trend to 2015. - Measures to enhance supervision and infrastructure: - CBJ actions in 2011 toward Basel II and FSAP recommendations: - Supervisory reviews of bank ICAAPs and semi-annual monitoring of financial soundness indicators. - Steps toward an automated data collection system expected operational by end-2012 to improve off-site monitoring and enable a statistical-based early warning system. - Passage of the Credit Information Law and associated by-laws (in August 2011) to enable a credit bureau. - Issuance of a circular in October 2011 requiring licensed banks to provide details (by mid-2012) on the impact of implementing Basel III. - Staff view: monetary authorities have implemented almost all recommendations in the 2008 FSAP Update. - Scheme renewals and market development: - Most CBJ-administered lending schemes (SME lending scheme and fixed rate 5-year credit facility to industry) were not renewed early in 2012 due to low demand; low-income housing lending scheme due to expire in May, 2012. - Framework for issuance of Islamic sukuk is progressing slowly; draft Sukuk Law awaits parliamentary approval and legal issues remain to be resolved. - AML/CFT progress: - Jordan recognized in November 2010 as the first MENA country in compliance with FATF targeted review recommendations. - AML/CFT supervision strengthened through amendments to AML/CFT Law and revised instructions; Jordanian AML/CFT Unit requested IMF technical assistance for further assessment. ### Medium-term outlook and policy challenges - Primary medium-term objectives: - Reduce vulnerabilities by reining in large fiscal and current account deficits and dependence on external grants. - Create jobs and provide social protection by achieving faster and more inclusive growth. - Policy actions needed to support those objectives: - Maintain a stable macroeconomic environment. - Improve business climate and governance. - Reduce generalized subsidies and build targeted transfers and social safety nets. - Enhance trade openness and accelerate labor market reforms. - Specific recommendations and planned reforms: - Improve regulatory and administrative environment for businesses; use the new Investment Law (passed June 2011) and Jordan Investment Board as a one-stop-shop to streamline licensing and registration. - Wind down universal subsidies and replace with better targeted subsidies/transfers to free up funds for capital spending and social spending. - Limit risks of mega-projects and avoid issuing debt guarantees for borrowing by public agencies in connection with prospective mega-projects (rail, nuclear power, Red Sea-Dead Sea project); donor financing and concessional funding suggested as alternatives. - Passage of the PPP Law in June 2011 seen as important for boosting infrastructure investment. - Implement National Trade Strategy and National Tourism Strategy to enhance trade, tourism, and attract FDI; negotiations and FTAs noted (e.g., Turkey in 2011). - Continue strengthening fiscal institutions: Treasury Single Account, Government Financial Management Information System, three-year medium-term framework, internal audit, enhanced Audit Bureau, and merge/reduce own-budget public agencies (62 agencies at end-2011). - Encourage good governance via strengthened Audit Bureau, Ombudsman Bureau (established 2009), and Anti-Corruption Commission (under revised Anti-Corruption Law of 2011). - Support poverty reduction: Poverty Analysis Report (2010) based on 2008 survey indicates some 13⅓ percent of the population had incomes below the poverty line; authorities drafting a new Poverty Reduction Strategy for 2012–15 and plan better targeting of transfers and capacity-building activities, including micro-credit in poverty pockets. *Source: Authorities and IMF staff estimates as presented in the IMF 2012 Article IV report excerpt.* ### 38. Outreach and technical assistance. ### 38. Outreach and technical assistance. ### Outreach and capacity building - The CBJ and IMF co-hosted a Research Workshop at the conclusion of the mission in response to a previous request of the authorities. - IMF staff delivered presentations on analytical papers covering: optimal reserves, unemployment, current account sustainability, and commodity subsidies (see Selected Issues chapters). - IMF staff conducted a training course on DSGE modeling for members of the CBJ Research Department, which was much appreciated by the authorities. ### Inclusive and sustainable growth to boost employment - Context and challenge: - Jordan has experienced periods of relatively strong growth that created employment for nationals and expatriates, yet the unemployment rate has for the last few years been fixed at about 13 percent. - Absorbing the 2010 unemployed and about 60,000 new labor market entrants anticipated each year would require annual real GDP growth of around 9⅓ percent, which is about 6 percentage points higher than current medium-term projections (Selected Issues, Chapter 7). - Annual growth of about 4½ percent (near potential) is insufficient to absorb anticipated new labor market entrants based on past labor market trends. - Job creation is constrained by a tightening fiscal situation that limits the public sector’s ability to absorb labor. - High remittances and education costs contribute to voluntary unemployment by keeping reservation wages high. - Policy priorities and recommended components of a growth and employment strategy: - Increase capital spending (within constraints of fiscal sustainability) to exploit high potential returns given Jordan’s low capital per worker and relatively efficient investment process; improve the final stage of the investment process—project evaluation and appraisal—to better create jobs for Jordanians (Selected Issues, Chapter 8). - Enhance linkages with the Gulf Cooperation Council (GCC) and examine impediments to accessing the GCC market, including customs and trade procedures and logistics, to support service sector development (tourism, financial sectors). - Support productivity improvements in manufacturing through skill enhancement, prioritizing vocational education, and research and development. - Broaden corporate financing sources beyond the equity market and bank financing, including access to longer-maturity financing and development of the corporate bond market (including sukuk corporate bonds) as market conditions permit. - Improve labor market functioning by reducing rigidities, decreasing regulatory and tax burdens in product and labor markets, addressing skill mismatches, and adopting measures to encourage higher labor force participation by Jordanians. - Continue developing labor-intensive SME access to finance via the donor-supported National SME Program (loan guarantees and targeted grants), ensure appropriate governance, and introduce a credit information bureau to facilitate SME financing. - Simplify business registration and regulation procedures to foster a more competitive business environment, especially for SMEs. - Ensure any revisions to the public sector compensation package or the structure of minimum wages do not distort incentives for private sector employment. - Inclusiveness: - The new growth strategy should be inclusive—benefiting all segments of the population—by creating an enabling environment, a level playing field for personal and business access to public services, and a healthy business climate. - Authorities’ initiatives to foster employment: - Enhanced SME formation through the National SME Program. - Facilitation of job creation in governorates via equity investment through the Governorates’ Investment Fund. - The new National Employment Strategy to expand vocational training and better align skills with emerging employment opportunities. - Authorities highlighted tourism, mineral exports, manufacturing, information communication technology, final consumer goods production, and eco- and family-oriented tourism as areas with employment potential. ### Key statistics and comparative indicators (as presented) - Unemployment rate: about 13 percent. - Anticipated new labor market entrants each year: around 60,000. - Required annual real GDP growth to absorb 2010 unemployed and new entrants: around 9⅓ percent. - Projected near-potential annual growth cited as insufficient: about 4½ percent. - Minimum wage comparisons and notes: - Data for Jordan minimum wage does not reflect the end-2011 minimum wage increase to $268. - (Table values reproduced in source include country comparisons for minimum wage levels and ratios; the text highlights sensitivity of minimum wage changes to private sector employment incentives.) ### Staff appraisal — macroeconomic assessment and policy guidance - Recent shocks and outlook: - Jordan has faced repeated sabotage of energy infrastructure, slowed tourism and remittances, regional political tensions, rising sovereign financing costs, and a precipitous decline in the terms of trade in 2010–11 from high import prices for oil and food. - Growth has slowed significantly; immediate challenge is to preserve macroeconomic stability while enhancing inclusive growth. - Risks: - Significant risks persist from global and domestic sources and unrest in neighboring countries. - As one of the world’s most energy-import-dependent countries, disruptions to energy imports (for example, further curtailment of critical gas supplies from Egypt) or higher energy-import prices would have serious repercussions. - Fiscal policy: - Near-term outlook hinges on restoration of strong domestic policies and maintaining fiscal discipline to place the public debt-to-GDP ratio on a downward path. - Staff supports the fiscal consolidation contained in the 2012 Budget; staff believes the decline in the overall deficit of about 1 percentage point of GDP in the current year is appropriate and achievable. - Implementation of fiscal plans, plus borrowing to cover sabotage-induced additional fuel products, would engender a small rise in the debt-to-GDP ratio in 2012 (to about 65½ percent of GDP). - Authorities have approved a three-year fiscal reform agenda combining tax reforms, further subsidy reforms, moderation of public sector wage bill growth, prioritization of capital spending, and improvements in tax administration and public sector financial management. - Monetary and exchange-rate policy: - Monetary policy should aim at containing inflationary pressures and supporting an adequate level of reserves. - Given rising regional and emerging market sovereign risk premia, a tightening of monetary conditions is appropriate to sustain attractiveness of dinar-denominated assets and contain inflation expectations. - Staff recommends monetary authorities remain ready to tighten monetary conditions further if needed. - The dinar’s peg to the U.S. dollar remains the keystone of financial stability and helps anchor inflation expectations; staff analysis indicates the dinar remains broadly in line with its medium-term fundamentals. - Financial sector resilience: - The Jordanian banking system is conservatively managed and effectively supervised, yielding strong macroprudential indicators and resilience to shocks. - Monetary authorities have implemented Basel II regulations and Jordanian banks are progressing toward major components of Basel III regarding capital adequacy and liquidity. - With rising private sector credit growth and slow economic growth, non-performing loans and loan provisioning should continue to be closely monitored. - Staff welcomes further enhancements to Jordan’s AML/CFT framework. - Structural reform priorities reiterated: - Tackling infrastructure bottlenecks through investment and structural reforms. - Improving the business climate and efficiency of labor markets, including reducing labor market rigidities and enhanced vocational training to reduce skill mismatches, to help remove key impediments to growth and employment. ### Proposed follow-up - It is proposed that the next Article IV consultation be held on the standard 12-month cycle. *Source: _cr12119 - 38. Outreach and technical assistance. (2012 Article IV Report — Jordan), International Monetary Fund.* ### Box 4. Exchange Rate Assessment ### Box 4. Exchange Rate Assessment ### Real and nominal exchange rate developments - Trade-weighted nominal effective (NEER) and real effective exchange rates (REER), and tourism-based measures of the real exchange rate index, indicate a modest appreciation relative to end-2009 values, ranging from 0 to 3 percent, driven by rising inflation differentials with trading partners. - Jordan’s REER trajectory followed several years of decline in line with the weakening U.S. dollar before the modest appreciation noted above. ### Export performance and tourism - Both goods and services export receipts are estimated to have grown by about 11 percent on average over the past five years (2007–11). - Tourism receipts account for about one quarter of exports of goods and services. - Tourism was adversely affected by regional instability during 2011, as reflected in a sharp decrease in tourist arrival numbers. ### CGER-based exchange rate evaluation results (medium term, 2017) - Estimates from the IMF’s three CGER-based methodologies—based on the projected level of the current account over the medium term (2017)—do not yield evidence of exchange rate misalignment. - Macroeconomic balance and equilibrium real exchange rate approaches suggest the exchange rate is broadly in equilibrium over the medium term (overvalued by between 2.2 and 2.5 percent). - External sustainability approach points to a small undervaluation (by 4.6 percent). - On average, the actual REER is calculated as undervalued by 1½ percent vis-à-vis the equilibrium REER. ### Alternative methodology and current account assessment - A developing country-specific version of the CGER macroeconomic balance approach (including Middle East countries) indicates Jordan’s current account imbalances have exhibited large fluctuations over time but narrowed since 2007, pointing to a current account position close to the current account norm. - Using the macroeconomic balance approach, Fund staff estimate Jordan’s equilibrium current account deficit under current policies (the current account ‘norm’) at around 6 percent of GDP. - Jordan’s projected medium-term (2017) deficit of 4½ percent of GDP is within one standard deviation of the estimated current account norm. - The 2011 current account deficit of 9½ percent of GDP is within one standard deviation of the ‘norm’ deficit of 6¼ percent of GDP. - Medium-term current account imbalances in Jordan—largely financed by private capital flows (particularly FDI)—appear sustainable and in line with equilibrium levels predicted by fundamentals. ### Key implications and conclusion - Across standard CGER approaches and alternative country-specific methodologies, there is little evidence of a significant real exchange rate misalignment for Jordan over the medium term (2017). - Medium-term projected current account balances are close to norms implied by fundamentals, suggesting external positions are broadly sustainable. *Source: Box 4. Exchange Rate Assessment, _cr12119 - Box 4. Exchange Rate Assessment (IMF Country Report excerpt)._ * ### Box 7. The National Aid Fund ### Box 7. The National Aid Fund ### Overview - The National Aid Fund (NAF) is the primary agency responsible for distributing cash assistance in Jordan. - Established in 1986, following the elimination of food subsidies, to provide a more formal social safety net for the unemployable poor. - By the late 1990s, the NAF had emerged as the single most comprehensive state-funded social safety net. - In recent years, the NAF shifted assistance away from strict application of categorical criteria to a more flexible approach in identifying beneficiaries. - The NAF was expanded in 2008 with the goal of mitigating the impact of the food and fuel crisis by raising the ceiling of recurring aid disbursed to beneficiary families and broadening the base of entitled beneficiaries to include the poor in casual employment. ### Programs (NAF includes 5 main programs) - Recurring Financial Aid Program (RFAP), to raise the income of poor families; - Care for the Handicapped Program, to provide income support to poor households to cover the cost of looking after handicapped family members; - Emergency Financial Aid Program, to help poor families deal with accidents or emergencies; - Physical Rehabilitation Program, to provide financial assistance to purchase essential medical equipment and supplies for those in special physical needs to help them perform social and productive functions; and - Vocational Training and Rehabilitation Program, to provide suitable job opportunities for the children of poor beneficiary families, in coordination with specialist training bodies. ### Eligibility and targeting - Eligibility for all programs is conditioned on the family being of Jordanian nationality and permanently resident in Jordan. - Eligibility also requires providing evidence of household monthly income, which needs to be lower than a specified threshold. ### Budget, coverage, and program concentration - In 2010, the NAF’s budget amounted to more than JD 78 million (0.4 percent of GDP), with about 88,000 beneficiaries (1.4 percent of the population). - With over JD 74 million in expenditure and 73,000 beneficiaries in 2010, the RFAP accounts for about 95 percent of the total NAF budget. *Source: Box 7. The National Aid Fund, IMF staff report excerpt.* ### Annex 1. Jordan: Public Debt Sustainability Analysis ### Annex 1. Jordan: Public Debt Sustainability Analysis ### Overview - Public debt is expected to decline to about 62 percent of GDP in 2017. - After a steady decline in 2003–08, the debt ratio increased by about 10 percentage points of GDP between 2009–11 due to increased expenditure, a decline in external grants, and a cyclical decline in revenues. - About one third of the 2009–11 increase occurred in 2011 and was mainly due to government borrowing in support of the national electricity company (NEPCO). - Based on the 2012 budget and assuming largely unchanged policies thereafter, the debt ratio is projected to increase slightly in 2012 and then decline over the medium term. ### Vulnerabilities and Stress Tests - Contingent liabilities shock: - A contingent liabilities shock—an increase in the debt ratio by 10 percent of GDP in 2012—would cause the debt path to remain about 9–10 percentage points above the baseline throughout the projection period. - Exchange rate shock: - As about one third of the debt is foreign currency denominated, a 30 percent real exchange rate depreciation would increase the debt-to-GDP ratio by around 11 percentage points relative to the baseline in 2012. - Smaller shocks: - Individual one-half standard deviation shocks to real growth, interest rates, and the primary balance would cause debt-to-GDP ratios to exceed 70 percent by the end of the projection period. - Bound tests summary (figure A.1): - Growth shock, PB shock, and interest-rate shock scenarios show baseline debt at 62 (percent of GDP) with scenario averages ranging in the low 70s for adverse shocks. ### Policy Implications and Scenarios - Baseline fiscal adjustment: - The average primary deficit (including grants) declines from 2.7 percent of GDP in 2012 to 0.4 percent in GDP in 2017 under the baseline. - No policy change (constant primary balance at 2011 level): - Holding the primary deficit constant at 4 percent of GDP (its 2011 level) over 2012–17 would cause the debt ratio to grow to about 68 percent by 2017. - Historical-average scenario: - The debt ratio would decline (approaching 46 percent by 2017) if key assumptions are held at their historical averages, reflecting that the primary deficit (including grants) was, on average, above one percent of GDP in 2001–10. - Other scenario outcomes shown in the table: - Scenario with key variables at their historical averages: debt approaching 45.5 (percent of GDP) by 2017 (table row labeled Scenario with key variables at their historical averages). - Scenario with no policy change (constant primary balance) 2012-2017: debt series showing 65.5 (2012), 65.9 (2013), 65.6 (2014), 66.2 (2015), 67.1 (2016), 68.5 (2017). - Scenario with 20 percent temporary (2012-13) shock to FDI, remittances and tourism receipts: debt series shown peaking at 86.5 (2013) and declining to 79.3 (2017) in the table excerpt. - Scenario with disruptions to natural gas supplies in 2012 similar to 2011: debt series shown 68.5 (2012), 71.1 (2013), 69.9 (2014), 68.9 (2015), 67.8 (2016), 66.8 (2017). ### Key Statistics and Projections (selected exact figures from Table A.1) - Baseline central government debt including government guarantees (net), debt-to-GDP (2007–2017): - 2007: 67.6 - 2008: 54.9 - 2009: 57.1 - 2010: 61.1 - 2011: 64.6 - 2012: 65.5 - 2013: 65.4 - 2014: 64.4 - 2015: 63.7 - 2016: 62.9 - 2017: 62.1 - Foreign-currency denominated share of central government debt (percent of GDP), 2007–2017: - 2007: 43.3 - 2008: 23.4 - 2009: 22.9 - 2010: 24.6 - 2011: 21.6 - 2012: 21.1 - 2013: 19.9 - 2014: 18.9 - 2015: 18.0 - 2016: 17.2 - 2017: 15.8 - Change in central government debt (percent of GDP), 2007–2017: - 2007: -1.2 - 2008: -12.7 - 2009: 2.3 - 2010: 4.0 - 2011: 3.4 - 2012: 0.9 - 2013: -0.1 - 2014: -1.0 - 2015: -0.7 - 2016: -0.8 - 2017: -0.8 - Identified debt-creating flows (4+7+12) (percent of GDP), 2007–2017: - 2007: -6.2 - 2008: -11.1 - 2009: 3.3 - 2010: -0.1 - 2011: 0.1 - 2012: 1.0 - 2013: 0.7 - 2014: 0.6 - 2015: 0.2 - 2016: -0.3 - 2017: -0.9 - Primary deficit (percent of GDP), 2007–2017: - 2007: 2.5 - 2008: 3.1 - 2009: 6.6 - 2010: 3.5 - 2011: 4.0 - 2012: 2.7 - 2013: 2.2 - 2014: 1.9 - 2015: 1.4 - 2016: 0.9 - 2017: 0.4 - Revenue and grants (percent of GDP), 2007–2017: - 2007: 32.3 - 2008: 30.1 - 2009: 26.4 - 2010: 24.9 - 2011: 26.1 - 2012: 25.8 - 2013: 25.6 - 2014: 25.9 - 2015: 26.0 - 2016: 26.2 - 2017: 26.4 - Primary (noninterest) expenditure (percent of GDP), 2007–2017: - 2007: 34.8 - 2008: 33.2 - 2009: 33.0 - 2010: 28.3 - 2011: 30.0 - 2012: 28.4 - 2013: 27.8 - 2014: 27.8 - 2015: 27.4 - 2016: 27.1 - 2017: 26.8 - Automatic debt dynamics (percent of GDP), 2007–2017: - 2007: -5.2 - 2008: -12.6 - 2009: -1.9 - 2010: -3.5 - 2011: -3.8 - 2012: -1.7 - 2013: -1.5 - 2014: -1.3 - 2015: -1.2 - 2016: -1.3 - 2017: -1.3 - Gross financing need (percent of GDP) and in billions of U.S. dollars, 2007–2017: - Percent of GDP: 2007: 8.3; 2008: 8.1; 2009: 10.3; 2010: 7.0; 2011: 7.6; 2012: 6.7; 2013: 6.3; 2014: 6.0; 2015: 5.5; 2016: 5.0; 2017: 4.6 - In billions of U.S. dollars: 2007: 1.4; 2008: 1.8; 2009: 2.5; 2010: 1.9; 2011: 2.2; 2012: 2.1; 2013: 2.1; 2014: 2.1; 2015: 2.1; 2016: 2.1; 2017: 2.0 ### Selected Key Macroeconomic Assumptions Underlying Baseline (exact series excerpts) - Real GDP growth (percent), selected years: - 2007: 8.2 - 2008: 7.2 - 2009: 5.5 - 2010: 2.3 - 2011: 2.5 - 2012: 6.0 - 2013: 2.4 - 2014: 2.7 - 2015: 3.0 - 2016: 3.3 - 2017: 3.7 - Average nominal interest rate on public debt (percent) (table shows values; selected): - 2007: 5.0 - 2008: 4.6 - 2009: 4.6 - 2010: 4.1 - 2011: 3.7 - 2012: 4.2 - 2013: 4.2 - 2014: 4.4 - 2015: 4.4 - 2016: 4.9 - 2017: 5.1 - Inflation rate (GDP deflator, percent) (selected): - 2007: 5.1 - 2008: 19.9 - 2009: 2.8 - 2010: 8.4 - 2011: 8.0 - 2012: 6.3 - 2013: 5.8 - 2014: 4.1 - 2015: 3.6 - 2016: 3.1 - 2017: 3.0 *Source: Annex 1. Jordan: Public Debt Sustainability Analysis, _cr12119 - Annex 1. Jordan: Public Debt Sustainability Analysis.* ### ANNEX I. JORDAN—FUND RELATIONS ### ANNEX I. JORDAN—FUND RELATIONS ### Membership Status - Joined: August 29, 1952; Article VIII ### General Resources Account - Quota: 170.50 SDR Million — 100.00 Percent Quota - Fund holdings: 175.26 SDR Million — 102.79 Percent - Reserve position in Fund: 0.33 SDR Million — 0.19 Percent ### SDR Department - Net cumulative allocation: 162.07 SDR Million — 100.00 Percent - Holdings: 146.43 SDR Million — 90.35 Percent ### Outstanding Purchases - Extended arrangements: 5.07 SDR Million — 2.98 Percent of Quota ### Latest Financial Arrangements (type, approval date, expiration date, amount approved (SDR Million), amount drawn (SDR Million)) - SBA: 7/03/02 — 7/02/04 — 85.28 — 10.66 - EFF: 4/15/99 — 5/31/02 — 127.88 — 127.88 - EFF: 2/09/96 — 2/08/99 — 238.04 — 202.52 ### Projected Obligations to Fund (SDR million; based on existing use of resources and present holdings of SDRs) - 2011: - Principal: 0.00 - Charges/interest: 0.11 - Total: 0.11 - 2012: - Principal: 5.07 - Charges/interest: 0.03 - Total: 5.11 - 2013: - Principal: 0.00 - Charges/interest: 0.03 - Total: 0.03 - 2014: - Principal: 0.00 - Charges/interest: 0.03 - Total: 0.03 ### Safeguards Assessment - A full safeguards assessment of the Central Bank of Jordan (CBJ) was completed on June 27, 2003 with respect to the Stand-By Arrangement (SBA) approved July 3, 2002 (expired July 2, 2004). - Assessment conclusions: - CBJ has made progress in strengthening its safeguards as recommended in the May 2001 assessment. - The assessment proposed a set of measures, the majority of which have been implemented. ### Exchange System - The Jordanian dinar is fully convertible and is officially pegged to the SDR. - In practice, the exchange rate regime is pegged to the U.S. dollar since October 1995 at JD 1 = $1.41044. - Jordan accepted the obligations of Article VIII, Sections 2, 3, and 4 in 1995 and maintains an exchange system free of restrictions on payments and transfers for current international transactions. ### Last Article IV Consultation - The 2010 Article IV consultation was concluded by the Executive Board (on a lapse of time basis) on September 15, 2010. - The Staff Report and Executive Board Assessment are referenced in IMF Country Report 10/297. ### Financial Sector Assessment Program - Jordan participated in a Financial System Stability Assessment in 2003; report presented to the Executive Board at the time of the 2003 Article IV consultation (SM/04/1). - A Financial System Stability Assessment Update was conducted in 2008; report presented to the Executive Board at the time of the 2008 Article IV consultation (SM/09/104). ### Technical Assistance (TA) — summary of topics and chronology (2002–12) - Fiscal assistance highlights: - Pension reform (January–June 2002) - GST reform (January–September 2002) - Macrofiscal capacity and treasury single account (November 2002) - Revenue administration reform (February, October 2003; February–March 2005; April–August 2006; October–November 2006; March/April, July, December 2007; February 2010 expert visit) - Peripatetic advisor on single treasury account (June, August, December 2003) - Public expenditure management and public financial management (February, May 2004; February, May 2006; April 2010; July 2010; January 2011) - Resident expert in macrofiscal management (August 2004–June 2005) - Distributional effects of replacing oil subsidies (February 2005) - Fiscal ROSC (April 2005) - Subsidy reform assessment and follow-up (October 2011; January 2012 regional workshop on compliance management) - Public-Private Partnership and PPP fiscal risks (March 2011; April 2011) - Assessment visits, compliance management, and capital expenditures follow-up through 2011 - Monetary and financial assistance highlights: - FSAP (August–September 2003); FSAP update (November 2008) - Debt management strategy and strengthening public debt management (April–May 2008; June 2010; June 2011 regional workshop; July 2011 capacity building) - Review of CBJ budgetary system (August 2008) - Implementation of Basel II (April 2012; July 2010) - Developing government domestic Sukuk market (October 2009) - Credit bureau regulation development and licensing (July 2010; July 2011; December 2011) - Risk management, regulation and supervision, markets instruments and infrastructure (January 2011) - Early warning systems (December 2011) - Statistical assistance highlights: - Data module ROSC and follow-ups (January–February 2002; December 2003; Data ROSC update published February 2004) - Balance of payments statistics (October 2003–January 2004; March–May 2004; February 2011 improving BOP and IIP compilation practices (METAC)) - Government finance statistics (April–May 2004) - National accounts statistics and SDDS assessments (December 2006; October–November 2006; October 2010; February 2009; December 2009) - Monetary and financial statistics (October 2008) - Special data dissemination standard assessment (December 2009) - LTE training on external debt statistics (December 2011) - Other technical assistance and outreach: - Financial programming workshop (March 2008) - Safeguards and fiscal investment (FIN) (February 2010) - Central Bank of Jordan–IMF research workshops and outreach (April 2010; July 2010; February 2012) - Data quality seminar (May 2010) - Development Policy Loan coordination with World Bank (October 2010; December 2010 DPL pre-evaluation (World Bank)) *Source: ANNEX I. JORDAN—FUND RELATIONS (As of February 29, 2012).* ### 1. Latest data on economic activity confirm a continued rebound from the nadir ### 1. Latest data on economic activity confirm a continued rebound from the nadir ### Economic activity and growth - GDP growth for 2011 reached 2.6 percent, slightly above expectations. - Momentum continued into Q4 2011: GDP increased by 3.1 percent due to strong performance in the manufacturing, transportation, and financial services sectors. - Background trends: - Real GDP grew by only 2⅓ percent in 2010. - Real GDP is expected to grow by 2½ percent in 2011 (staff projection). - Real GDP is likely to grow by 2¾ percent in 2012, underpinned by modest growth in mining and financial services and continued growth in key trading-partner Gulf Cooperation Council countries. - Sectoral and labor observations: - Tourism saw a modest recovery in Q1 2012, supported by medical tourism. - Unemployment rate stabilized around 13 percent over recent years; the authorities report it has “stabilized at around 13 percent.” - Bank private sector credit grew by 9½ percent y-o-y in December 2011; credit to private sector projected at 13.2 percent in 2012 (table). ### External position and international reserves - International reserves developments: - Reserves fell by almost US$1.1 billion (10.6 percent) compared to end-December 2011, to reach US$9.6 billion (about 5.6 months of import cover) by end-March 2012. - Reserves were already below the level projected for end-2012. - Gross usable international reserves (table): 11,093 (2009), 12,449 (2010), 10,737 (2011), 9,776 (2012). - In months of prospective import cover (table): 7.8 (2009), 7.7 (2010), 6.6 (2011), 5.9 (2012). - Current account and trade: - Current account balance (after grants), of which: -4.9 (2009), -5.6 (2010), -9.5 (2011), -7.9 (2012). - Exports, f.o.b. ($ billions): 6.4 (2009), 7.0 (2010), 8.0 (2011), 8.9 (2012). - Imports, f.o.b. ($ billions): 12.7 (2009), 13.8 (2010), 16.1 (2011), 16.0 (2012). - Drivers of reserve drawdown and external pressures: - Higher prices of oil imports. - Continued need to substitute more expensive refined fuel products for natural gas for electricity generation. - Since the sabotage of the Arab Gas Pipeline on the Sinai Peninsula on February 5, 2012—the thirteenth time since January 2011—there has been no flow of natural gas from Egypt to Jordan; continued disruption could have major balance of payments implications. - External financing and grants: - Budgetary grants of $1.4 billion (5 percent of GDP) were provided by Saudi Arabia during 2011, helping fund the cost of fuel subsidies. - The external current account deficit widened to 9½ percent of GDP in 2011 (from 5⅔ percent of GDP in 2010). - Current account deficit projected to narrow to 8 percent of GDP in 2012 due to a moderation of energy imports and buoyant mining exports. ### Fiscal position and policy reforms - Fiscal outcomes and projections: - Overall fiscal deficit expected to rise to about 6 percent of GDP in 2011, mainly due to increased commodity subsidies and other social spending (costing an additional 2⅓ percent of GDP) and cyclical weakening in domestic revenues. - The 2012 overall deficit is expected to narrow by about 1 percent of GDP relative to the 2011 outturn, reaching 5¼ percent of GDP. - Government and government-guaranteed net debt: 57.1 (2009), 61.1 (2010), 64.6 (2011), 65.5 (2012) (table). - Public debt-to-GDP ratio rose to about 64 percent at end-2011 and would rise slightly to 65½ percent by end-2012 given likely borrowing for own-budget entities. - Fiscal policy measures in the 2012 budget: - Raise domestic revenue: remove tax exemptions, revamp property transfer fees, and higher tax rates on luxury goods. - Contain current spending: freeze public sector hiring, reduce operational costs of Ministries, and reform the present system of universal subsidies for gasoline and diesel. - Implement targeted transfers to alleviate higher fuel costs associated with phasing out fuel subsidies. - Phase out some inefficient tax exemptions, broaden the tax base, and raise taxes on luxury goods to rein in the fiscal deficit. - Reinstate the automatic fuel pricing mechanism and abandon general commodity subsidies in favor of a well-targeted system. - Additional measures to mitigate oil-price impact: rationalize energy consumption on public roads, raise fees and registration licenses on several government services. - Fiscal risks and recommendations: - Further fiscal consolidation will be essential over the medium term to return fiscal and external balances to a sustainable level. - Medium-term strategy elements suggested by Executive Directors: enhanced tax administration, further fuel subsidy reforms, better-targeted social and capital spending, continued containment of the public sector wage bill, and improved public sector financial management. ### Electricity pricing and energy issues - Electricity pricing adjustments: - Authorities raised electricity prices for large consumers on February 1 (2012). - On March 13 (2012) the revised electricity pricing schedule was withdrawn due to customer complaints about billing irregularities. - A committee of inquiry will recommend a revised pricing schedule that progressively increases prices for higher consumption and entails a higher average price for electricity consumers. - Energy supply vulnerabilities: - Repeated sabotage of the Arab Gas Pipeline has led to no flow of natural gas from Egypt since February 5, 2012; longer interruptions could significantly affect the balance of payments. - Increased government borrowing on behalf of the National Electric Power Company to cover costly imported fuel oil used during interrupted natural gas supply contributed to higher public debt. ### Monetary policy and financial sector stability - Monetary stance and exchange rate management: - Monetary policy tightened since mid-2011; policy rates were raised further in February 2012. - The Central Bank of Jordan stands ready for further tightening if market conditions warrant. - Safeguarding the exchange rate peg to the U.S. dollar remains central to financial stability; U.S. dollar per Jordanian dinar (end-period) recorded as 1.4 (2009), 1.4 (2010), 1.4 (2011), 1.4 (2012) (table). - The Jordanian dinar real effective exchange rate appreciated modestly by 2½ percent between December 2009 and November 2011 (text); table shows Real effective exchange rate (percent change): -4.4 (2009), 2.1 (2010), 3.6 (2011). - Banking sector soundness: - Banking indicators: JD loan/deposit ratio near 73 percent at December 2011. - Non-performing loans increased slightly to 8½ percent at mid-2011. - Banks remain profitable, well capitalized, deposit-funded, with high liquidity ratios and provisioning. - Directors welcomed improvements in banking regulation and supervision and progress implementing Basel II; banks are already well placed to satisfy Basel III guidelines on capital adequacy and liquidity. - Practical step: establishment of the first credit bureau in Jordan projected to start operating by end 2012. - Staff cautions on the risk of rising non-performing loans and provisioning requirements over the medium term; Central Bank continues monitoring exposures and stands ready to take remedial actions. ### Executive Board assessment and policy recommendations - Executive Directors’ summary: - Commended authorities’ track record of prudent and effective macroeconomic management. - Noted external and domestic shocks have dampened activity and heightened downside risks. - Agreed policy focus should be on reducing fiscal and external imbalances and promoting faster and more inclusive GDP growth. - Recommended policy priorities: - Implement comprehensive medium-term strategy to restore fiscal buffers and reduce public debt, including enhanced tax administration and fuel subsidy reforms. - Continue fiscal tightening consistent with the 2012 budget and the authorities’ three-year fiscal reform agenda. - Safeguard the exchange rate peg; scope for further tightening of monetary stance to contain inflation risks and maintain adequate international reserve buffer. - Maintain vigilance in banking regulation and supervision; address rising non-performing loans if they materialize. - Promote inclusive growth by improving investment climate and governance, addressing labor market rigidities, resolving skill mismatches, and tackling infrastructure bottlenecks. ### Key statistics (selected from tables and text) - GDP growth and inflation: - Real GDP at market prices: 5.5 (2009), 2.3 (2010), 2.5 (2011), 2.8 (2012). - Consumer price index (average): -0.7 (2009), 5.0 (2010), 4.4 (2011), 5.9 (2012). - Unemployment rate (percent): 12.9 (2009), 12.5 (2010), 12.9 (2011). - Public finance (percent of GDP): - Central government revenue and grants: 26.4 (2009), 24.9 (2010), 26.1 (2011), 25.8 (2012). - Of which: grants: 2.0 (2009), 2.1 (2010), 5.9 (2011), 3.9 (2012). - Central government expenditure and net lending: 35.4 (2009), 30.4 (2010), 32.1 (2011), 31.0 (2012). - Central government overall fiscal balance including grants: -8.9 (2009), -5.6 (2010), -6.0 (2011), -5.2 (2012). - Money and credit: - Broad money: 9.3 (2009), 11.5 (2010), 8.1 (2011), 7.0 (2012). - Credit to private sector: 0.5 (2009), 7.2 (2010), 9.6 (2011), 13.2 (2012). - Reserves and liquidity indicators: - Gross usable international reserves ($ millions): 11,093 (2009), 12,449 (2010), 10,737 (2011), 9,776 (2012). - In months of prospective import cover: 7.8 (2009), 7.7 (2010), 6.6 (2011), 5.9 (2012). - Relative to short-term debt by remaining maturity: 5.2 (2009), 5.3 (2010), 7.5 (2011), 8.8 (2012). *IMF Executive Board Concludes 2012 Article IV Consultation with Jordan; Public Information Notice (PIN) No. 12/38; April 20, 2012.* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2012/_cr12119.pdf_