## IMF Executive Board Completes First Review Under the Extended Fund Facility for Jordan

_IMF News, June 21, 2017_

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## Bibliographic details
- Published: June 21, 2017

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### Review outcome and financing
- The Executive Board completed the first review of Jordan’s economic performance under the Extended Arrangement under the Extended Fund Facility (EFF).
- Completion of the first review enables the disbursement of SDR 51.465 million (about US$71 million).
- Total disbursements under the program after this review amount to SDR 102.93 million (about US$141.9 million).
- On August 24, 2016, the Executive Board approved a three-year extended arrangement under the EFF for Jordan for an amount equivalent to SDR 514.65 million (about US$723 million at the time of approval of the arrangement, or 150 percent of Jordan’s quota).
- The Executive Board approved the authorities’ requests for:
  - A waiver of non-observance of the performance criterion on the NIR of the Central Bank of Jordan (CBJ).
  - The rephrasing of access.

### Macroeconomic assessment
- The Jordanian economy has performed favorably under a difficult external environment.
- Macroeconomic stability and external viability have been maintained thanks to a prudent monetary policy and progress in reducing the fiscal deficit.
- Challenges noted:
  - Below-potential economic growth.
  - High unemployment.
  - Difficult social conditions.
- The program aims at advancing fiscal consolidation to gradually lower public debt and broad structural reforms to enhance the conditions for more social-friendly inclusive growth.

### Fiscal policy and structural reforms
- Authorities are committed to continue with a gradual and steady fiscal consolidation to bring public debt toward more sustainable levels.
- Specific fiscal and structural reform measures highlighted:
  - Continued removal of exemptions on the general sales tax and custom duties over the program period.
  - Reforms to tackle tax evasion.
  - Rationalization of expenditures.
  - Containment of contingent liabilities.
  - Improvements in the financial condition of the energy and water sectors.

### Monetary policy and financial sector resilience
- The Central Bank of Jordan has tightened its monetary policy stance since November 2016.
- The CBJ stands ready to increase the policy interest rates further to support the peg.
- The banking system is described as well capitalized and profitable.
- The gradual adoption of Basel III, complemented by an additional capital buffer decided by the authorities, is expected to provide important resilience to shocks and help preserve financial stability.
- Efforts to promote financial inclusion and facilitate access to credit and to improve the business environment are expected to support investment, productivity, and inclusive growth.

### Labor market and inclusion
- IMF Directors saw the critical need to advance reforms to lower the formal cost of labor to promote greater employment opportunities, especially for the youth and women.
- Further reforms to reduce the cost of formal jobs are deemed critical to address high unemployment, particularly for young people and women.

### External support and refugee crisis
- IMF calls for greater donor support through budget grants to help Jordan cope with the Syrian refugee crisis.
- Continued donor support through sufficient budget grants and concessional financing is emphasized as important to help Jordan cope with the refugee crisis and support the authorities’ program goals.

### Key quote
- “The authorities are committed to continue with a gradual and steady fiscal consolidation to bring public debt toward more sustainable levels- IMF’s Furusawa”

*IMF Communications Department, Press Release No. 17/237, June 21, 2017*

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## References

- [The Executive Board](http://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Mitsuhiro Furusawa](http://www.imf.org/external/np/omd/bios/mf.htm)
- [Jordan and the IMF](http://www.imf.org/external/country/JOR/index.htm)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/06/21/pr17237-imf-executive-board-completes-first-review-under-the-extended-fund-facility-for-jordan_