IMF Executive Board Completes the Sixth Review Under the Extended Fund Facility with Jordan

IMF News, June 29, 2023

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Canonical URL: IMF Executive Board Completes the Sixth Review Under the Extended Fund Facility with Jordan

Jordan’s four-year extended arrangement initially amounted to SDR 926.37 million (about US$1,235 million, equivalent to 270 percent of Jordan’s quota in the IMF) and was approved by the IMF’s Board on March 25, 2020.
The arrangement was augmented on June 30, 2021, to SDR 1070.47 million (about $1,430 million, equivalent to 312 percent of Jordan’s quota in the IMF).
On June 30, 2022, the arrangement was augmented again to SDR 1,145.954 million (about $1,530 million, equivalent to 334 percent of Jordan’s quota in the IMF).
The Executive Board completed the sixth review, making SDR 24.017 million (about US$32 million) immediately available.
Total IMF disbursements to Jordan since the start of 2020 amount to SDR 1,300 million (about US$1,735 million), including a purchase of SDR 291.55 million (about US$390 million) in May 2020 under the Rapid Financing Instrument.

The IMF-supported program remains firmly on track, with key quantitative targets met and strong performance on structural benchmarks, reflecting the authorities’ strong ownership.
Jordan managed to navigate recent external shocks and maintain macroeconomic stability in an uncertain and challenging environment.
Fiscal consolidation is on track, capital market access has been maintained, and inflation has remained relatively low and is declining.
Reserve coverage is strong.
Despite these positives, job creation is still weak and unemployment remains too high.

The economy is projected to continue to grow this year at 2.6 percent.
Other projections from staff estimates:
- Real GDP growth: 2021 = 2.2; 2022 = 2.5; 2023 = 2.6; 2024 = 2.7.
- Inflation (CPI, annual average): 2021 = 4.2; 2022 = … (not provided for 2022 onward in the table).
- GDP deflator: 2021 = 1.3 (other years not specified).
- Nominal GDP (in millions of Jordanian dinars): 2021 = 32,033; 2022 = 33,691; 2023 = 35,465; 2024 = 37,333.

Authorities are committed to continuing a gradual fiscal consolidation in the coming years to reduce public debt to 80 percent of GDP by 2028.
Fiscal measures to achieve consolidation include further broadening the tax base and improving the efficiency of public spending.
Fiscal policy is on track to meet this year’s deficit targets.
Monetary policy has responded quickly to U.S. Federal Reserve policy changes and remains focused on safeguarding the peg and maintaining strong reserve buffers.

Structural reforms need to continue—and be accelerated—to create a more dynamic private sector that can create sufficient jobs and contribute to higher living standards.
Priority reforms and areas for improvement include:
- Further improving the business environment.
- Strengthening competition.
- Reducing bureaucracy.
- Increasing labor market flexibility and female labor participation.
- Enhancing governance and transparency.
- Improving the financial viability and efficiency of the electricity and water sectors to reduce the drain on public finances and ensure delivery of essential services in the face of climate change risks.

Output and Prices
- Real GDP growth: 2021 = 2.2; 2022 = 2.5; 2023 = 2.6; 2024 = 2.7
- GDP deflator: 2021 = 1.3
- Nominal GDP (in millions of Jordanian dinars): 2021 = 32,033; 2022 = 33,691; 2023 = 35,465; 2024 = 37,333
- Inflation 1/ (Consumer Price Index, annual average): 2021 = 4.2
- Unemployment: 2021 = 24.1; 2022 = 22.9
Government Finances (in percent of GDP)
- Central government fiscal operations — Revenue and grants 2/: 2021 = 25.4; 2022 = 26.5; 2023 = 26.9; 2024 = 26.4
- Of which: grants: 2021 = 2.4; 2022 = 2.3; 2023 = 2.0
- Expenditures 2/: 2021 = 31.8; 2022 = 32.4; 2023 = 32.0; 2024 = 31.4
- Primary government balance (exc. grants, NEPCO, and WAJ): 2021 = -4.5; 2022 = -3.7; 2023 = -2.9; 2024 = -2.0
- Combined public sector balance 3/: 2021 = -5.9; 2022 = -5.2; 2023 = -4.8
- Government gross debt: 2021 = 111.7; 2022 = 114.1; 2023 = 113.8
- Government gross debt, net of SSC holdings of government debt: 2021 = 89.8; 2022 = 91.0; 2023 = 90.6; 2024 = 89.3
Money and Credit
- Broad money (percent change): 2021 = 6.7; 2022 = 5.5; 2023 = 5.6
- Credit to the private sector (percent change): 2021 = 4.9; 2022 = 8.0; 2023 = 5.8
Balance of Payments
- Current account (in percent of GDP): 2021 = -8.2; 2022 = -8.8; 2023 = -7.5; 2024 = -5.4
- FDI (in percent of GDP): 2021 = 0.3; 2022 = 1.4; 2023 = 1.8
- Gross reserves (in months of imports): 2021 = 6.9; 2022 = 7.2; 2023 = 6.8
- In percent of Reserve Adequacy Metric: 2021 = 114; 2022 = 102; 2023 = 99; 2024 = 91

Source: IMF Communications Department press release, June 29, 2023.