Frequently Asked Questions

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The IMF Executive Board completed the 1st Review under Jordan’s Extended Fund Facility Arrangement (EFF) on December 14, 2020.
Completion of the review released Fund financing in the amount of around US$148 million.
Total IMF disbursements to Jordan in 2020 reached US$689 million; this includes provision of US$400 million of emergency financing in May under the Rapid Financing Instrument.
An additional amount of about US$1 billion is expected to be disbursed over the next three years.
Some of the IMF planned disbursement under the EFF has been shifted to 2021-22 to help meet large financing needs and to frontload support.

IMF staff estimates that output has contracted by 3 percent in 2020.
Output is expected to increase by 2.5 percent in 2021, reflecting a gradual recovery as the pandemic abates.
Unemployment reached a record level of 23.9 percent by Q3-2020 and is expected to recede as the recovery sets in.
The current account deficit has risen to about 7 percent of GDP in 2020 and will remain around the same level in 2021, as expected recovery in tourism is largely offset by increases in imports.
International reserves are expected to remain adequate and should provide continued credibility to the peg.

Reduction in government revenues and increased pandemic-related spending led to higher fiscal deficits and public debt.
The central government primary deficit (excluding grants) is estimated at around 6 percent of GDP respectively in 2020.
The 2021 budget submitted to Parliament envisages a reduction in the deficits to around 3.7 percent of GDP in 2021.
The program extends into 2021 flexibility to accommodate higher-than-expected COVID related spending up to 0.5 percent of GDP.
The planned fiscal consolidation in 2021 is gradual: 0.7 percent of GDP in new discretionary measures.
The program can accommodate higher social protection spending if Jordan can secure additional budgetary grants.
Frontloaded IMF support is intended to signal other development partners to strengthen assistance.

The Central Bank reduced its main policy rate by 150 basis points.
The Central Bank reduced the reserve requirement ratio for banks by 2 percentage points, provided liquidity to banks, allowed rescheduling of loans, and supported SMEs and affected businesses with low cost credit.
The program emphasizes that stimulus measures should remain one-off and well-targeted, with plans for gradual deficit reduction and unwinding of monetary/financial stimuli once the recovery becomes entrenched.

The immediate priority is to meet critical health and social protection needs to save lives and livelihoods.
Authorities increased cash transfers for the unemployed and self-employed, provided in-kind transfers to the poor, imposed caps on salary reductions, and encouraged firms to retain workers.
The EFF program includes a floor (a minimum) on social spending and allows for higher social protection spending financed by additional external budgetary grants—aiming to ensure that the burden of fiscal consolidation does not fall on the poor.
Revenue reforms emphasize closing tax loopholes rather than raising tax rates.
Equity considerations explicitly inform the pace and design of medium-term fiscal consolidation and electricity tariff reforms.

Governance reforms are central to building public trust and sustaining reform momentum.
Amendments to the illicit gains law submitted to Parliament seek to enhance monitoring by the Jordan Integrity and Anti-Corruption Committee (JIACC) and transparency around asset disclosures by public officials.
Authorities committed to strengthening and digitizing procurement procedures and regulations to implement the Unified Public Procurement By-law.
Authorities are committed to transparency of COVID-related spending, including reporting on beneficial ownership of entities awarded contracts.

Support from Jordan’s international partners is crucial given significantly increased financing needs due to the COVID pandemic.
Robust financial support from multilateral and official bilateral lenders will be critical and may need to be stepped up if the downturn is more protracted.
Continued capacity building and IMF technical assistance are necessary to help authorities maintain reform momentum.

IMF staff switched, for program purposes, to reporting public debt on a general government debt concept at the time of the EFF request.
The general government concept is regarded as the international statistical standard and helps facilitate cross-country comparisons and evenhandedness in debt sustainability assessments.
In Jordan, the new methodology is described as near-general government: it covers the central government, the social security corporation (SSC), NEPCO, WAJ, and water distribution companies, but does not yet cover subnational governments and some other own-budget agencies.
Work is ongoing, with IMF technical assistance, to move toward full general government reporting in the near future.