## IMF Executive Board Concludes 2020 Article IV Consultation with Jordan

_IMF News, April 16, 2020_

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## Bibliographic details
- Published: April 16, 2020

---

### Background and recent economic performance
- The following assessments and projections predate the ongoing COVID-19 outbreak; the near-term outlook is subject to significant risks stemming from the outbreak.
- Growth has averaged only 2 percent since 2016.
- Per capita income in 2019 was about 10 percent below its 2010 level.
- Consumer price inflation:
  - rose to 3.5 percent during 2017–18 (primarily reflecting fiscal measures),
  - decreased to about 0.5 percent in 2019 (due to subdued food and imports prices, including fuel).
- Unemployment rate (excluding foreign labor) reached 19 percent in 2019, up from 18.5 percent in 2017.
- Current account deficit (excluding grants) narrowed from an average of 12 percent of GDP during 2017–18 to a projected 6 percent in 2019.
- Central Bank of Jordan (CBJ) continued adjusting its policy interest rate in line with the United States.
- Reserve buffers: 7 months of imports in 2019 (partly recouped after mid-2018 reserve losses).
- Fiscal consolidation progress in 2016–17 was significant but proved difficult to maintain during 2018–19 due to tax administration weaknesses, some policy reversals, and delays in implementation of fiscal measures.

### Outlook and projections (baseline)
- Growth projections:
  - 2.1 percent in 2020,
  - gradually increasing to 3.3 percent over the medium term.
- Baseline scenario assumptions:
  - Fiscal consolidation of about 4 percent of GDP during 2020–24 to place public debt on a downward path.
  - A strengthened growth agenda, including reduced business costs (particularly on electricity and labor) and measures to increase employment for youth and women, while enhancing Jordan’s social safety net.
- Inflation expected to gradually reach 2.5 percent over the medium term.
- Current account deficit (excluding grants) projected to continue narrowing to about 5 percent of GDP over the medium term.
- Reserves buffers expected to remain adequate at 8 months of imports.

### Executive Board assessment and recommendations
- Executive Directors commended authorities for preserving macroeconomic stability and improving the business climate amid challenging external conditions.
- Key concerns highlighted:
  - Disappointing growth outcomes,
  - High unemployment,
  - Rising public debt,
  - Significant challenges related to the COVID-19 pandemic and the large population of Syrian refugees.
- Directors supported the new financing arrangement with the Fund, its focus on fiscal consolidation and growth-promoting reforms, while noting that continued expansion of the COVID-19 outbreak could put program objectives at risk.
- Directors welcomed authorities’ early measures to mitigate the outbreak's impact and saw scope to adjust program modalities going forward given rapidly changing circumstances.
- Calls for greater donor support to help Jordan achieve program objectives and protect refugees.
- Fiscal policy guidance:
  - Encourage steady fiscal consolidation using both revenue and expenditure measures to bring public debt on a downward path.
  - Focus on broadening the tax base.
  - Mitigate fiscal pressures from state-owned electricity and water sectors.
  - Improve public financial management.
  - Ensure better targeted social safety nets to protect the most vulnerable.
  - Some Directors expressed concerns about the imposition of a customs service fee on imports from the EU and called for considering other revenue measures.
- Monetary and financial sector guidance:
  - Monetary policy appropriately focused on supporting the peg and the economy.
  - Welcome overall soundness of Jordan’s financial sector; encourage continued efforts to preserve stability and promote financial inclusion.
- Structural reforms:
  - Support for an ambitious structural agenda to remove impediments to growth and reduce unemployment, particularly among women and youth.
  - Encourage efforts to improve the business environment and enhance competitiveness, including through energy sector reform.
  - Stress that improvements in economic governance are essential to enhance public sector transparency and accountability.

### Key statistics and macroeconomic indicators (selected, Act./Proj., 2018–25)
- Real GDP at market prices (percentage change):
  - 2018: 1.9
  - 2019: 2.0
  - 2020: 2.1
  - 2021: 2.3
  - 2022: 2.6
  - 2023: 2.9
  - 2024: 3.1
  - 2025: 3.3
- Nominal GDP at market prices (percentage change):
  - 2018: 3.7
  - 2019: 3.6
  - 2020: 4.0
  - 2021: 4.9
  - 2022: 5.2
  - 2023: 5.5
  - 2024: 5.7
  - 2025: 5.9
- Nominal GDP at market prices (JD millions):
  - 2018: 29,984
  - 2019: 31,058
  - 2020: 32,313
  - 2021: 33,882
  - 2022: 35,632
  - 2023: 37,582
  - 2024: 39,716
  - 2025: 42,052
- Nominal GDP at market prices ($ millions):
  - 2018: 42,291
  - 2019: 43,805
  - 2020: 45,575
  - 2021: 47,789
  - 2022: 50,257
  - 2023: 53,008
  - 2024: 56,017
  - 2025: 59,312
- Consumer price inflation (annual average):
  - 2018: 4.5
  - 2019: 0.3
  - 2020: 1.5
  - 2021: 1.7
- Unemployment rate (period average, percent) 1/: 18.3 (2018)
- Fiscal operations (percent of GDP):
  - Revenue and grants:
    - 2018: 26.1
    - 2019: 24.7
    - 2020: 27.0
    - 2021: 26.0
    - 2022: 25.5
    - 2023: 24.5
    - 2024: 24.3
    - 2025: 24.0
  - Of which: grants:
    - 2018: 3.0
    - 2019: 3.2
    - 2020: 2.2
    - 2021: 1.0
    - 2022: 0.9
  - Expenditure 2/:
    - 2018: 29.8
    - 2019: 29.7
    - 2020: 30.0
    - 2021: 29.9
    - 2022: 29.6
    - 2023: 29.3
    - 2024: 29.1
  - Unidentified measures 3/:
    - 2019: 0.6
    - 2020: 1.2
    - 2021: 2.4
  - Overall fiscal balance 4/:
    - 2018: -3.3
    - 2019: -5.0
    - 2020: -3.0
    - 2021: -3.4
    - 2022: -3.1
    - 2023: -2.6
    - 2024: -1.6
  - Primary government balance (excluding grants):
    - 2018: -3.8
    - 2019: -2.3
    - 2020: -1.6
    - 2021: -1.0
    - 2022: -0.3
    - 2023: 0.4
- Combined public sector balance 5/:
  - 2018: -4.2
  - 2019: -5.1
  - 2020: -4.0
  - 2021: -3.2
  - 2022: -2.4
  - 2023: -1.7
- Government and guaranteed gross debt 6/ (% of GDP):
  - 2018: 94.4
  - 2019: 99.1
  - 2020: 100.4
  - 2021: 100.7
  - 2022: 100.2
  - 2023: 99.6
  - 2024: 98.0
  - 2025: 96.1
- Government and guaranteed gross debt, net of SSC's holdings 6/ (% of GDP):
  - 2018: 76.3
  - 2019: 79.4
  - 2020: 79.9
  - 2021: 79.7
  - 2022: 78.7
  - 2023: 77.8
  - 2024: 75.8
  - 2025: 73.6
- External sector:
  - Current account balance (including grants), of which:
    - 2018: -7.0
    - 2019: -2.9
    - 2020: -3.6
    - 2021: -2.8
  - Current account balance (excluding grants):
    - 2018: -10.6
    - 2019: -6.1
    - 2020: -6.9
    - 2021: -6.4
    - 2022: -5.6
    - 2023: -4.5
  - Exports of goods, f.o.b. ($ billions):
    - 2018: 7.8
    - 2019: 8.4
    - 2020: 8.7
    - 2021: 9.2
    - 2022: 9.7
    - 2023: 10.3
    - 2024: 11.0
    - 2025: 11.6
  - Imports of goods, f.o.b. ($ billions):
    - 2018: 18.1
    - 2019: 17.4
    - 2020: 18.4
    - 2021: 19.1
    - 2022: 19.8
    - 2023: 20.5
    - 2024: 21.3
  - Oil and oil products ($ billions): 3.8 (2018)
  - Private capital inflows (net):
    - 2018: 2.8
    - 2019: 3.5
    - 2020: 4.1
- Monetary sector (percentage change):
  - Broad money:
    - 2018: 1.3
    - 2019: 6.8
    - 2020: 7.5
  - Net foreign assets:
    - 2018: -19.3
    - 2019: 23.5
  - Net domestic assets:
    - 2018: 9.1
    - 2019: 8.2
  - Credit to private sector:
    - 2018: 4.7
    - 2019: 5.6
  - Credit to central government:
    - 2018: 14.1
- Memorandum items:
  - Gross usable international reserves ($ millions):
    - 2018: 12,513
    - 2019: 13,513
    - 2020: 15,307
    - 2021: 16,991
    - 2022: 17,860
    - 2023: 17,885
    - 2024: 18,612
    - 2025: 19,401
  - In months of prospective imports:
    - 2018: 6.7
    - 2019: 7.0
    - 2020: 7.7
    - 2021: 8.3
    - 2022: 8.1
    - 2023: 8.0
  - In percent of reserve adequacy metric:
    - 2018: 97
    - 2019: 98
    - 2020: 104
    - 2021: 111
    - 2022: 106
    - 2023: 107
  - Net international reserves ($ millions):
    - 2018: 11,430
    - 2019: 12,756
    - 2020: 14,462
    - 2021: 15,879
    - 2022: 16,485
    - 2023: 16,259
    - 2024: 16,907
    - 2025: 17,809
  - Population (millions) 7/:
    - 2018: 9.9
    - 2019: 10.1
    - 2020: 10.2
    - 2021: 10.4
    - 2022: 10.5
  - Nominal per capita GDP ($):
    - 2018: 4,270
    - 2019: 4,350
    - 2020: 4,464
    - 2021: 4,631
    - 2022: 4,830
    - 2023: 5,061
    - 2024: 5,315
    - 2025: 5,627
  - Real effective exchange rate (end of period, 2010=100) 8/:
    - 2018: 117.7

*Source: IMF Press Release No. 20/146 — Executive Board Concludes 2020 Article IV Consultation with Jordan.*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Jordan and the IMF](http://www.imf.org/external/country/JOR/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

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