News Brief: IMF Approves US$20 Million Disbursement to Jordan

July 25, 2000

The International Monetary Fund's (IMF) Executive Board completed today its second review of Jordan's economic program supported by a three-year SDR 127.88 million (about US$169 million) Extended Fund Facility credit (see News Brief 99/68). Completion of this review allows the release of a further SDR 15.22 million disbursement (about US$20 million), which brings total disbursements to Jordan under the current program to SDR 36.54 million (about US$48 million).

At the completion of the Executive Board's discussion of Jordan's economic and structural reforms, Stanley Fischer, First Deputy Managing Director and Acting Chairman, issued the following statement:

"Jordan's economic conditions since the beginning of 1999 have continued to improve. Positive developments over the past year include the strengthened demand for dinar-denominated assets, the strong rebound in international reserves, lower interest rates, and the recovery of international trade. These achievements reflect restrained macroeconomic policies and the implementation of a number of important structural measures, especially in the areas of privatization and trade reform.

"However, economic growth has been disappointing, and an acceleration of growth is urgently needed to raise per capita incomes and improve the welfare of a rapidly growing population. This will require a reduction in the fiscal deficit to gradually lower the burden of public debt, and continued vigorous pursuit of structural reform.

"The overall fiscal deficit for 2000 is targeted around the same level as in 1999 on account of the costs of structural reform and the impact of higher prices for imported oil. The authorities' decision to strictly limit spending out of privatization receipts is an important step toward reducing the heavy debt burden. Looking to the future, the authorities plan to steadily reduce the fiscal deficit. This will require determined efforts to contain expenditure commitments and further progress with tax reform.

"The on-going structural reform program is essential for laying the foundation for stimulating investment and growth. Private capital and management is being introduced into the airline and power sectors, and the privatization program will be expanded. In addition, the authorities are taking further steps to modernize the system of direct and indirect taxation, and to develop the securities market," Mr. Fischer said.


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