Amman, Jordan:An International Monetary Fund (IMF) mission
led by Ron van Rooden visited Amman during May 3–17, 2023, to conduct the
sixth review of Jordan’s economic reform program supported by the IMF’s
Extended Fund Facility (EFF). At the end of the visit Mr. van Rooden issued
the following statement.
“We are pleased to announce that the IMF team and the Jordanian authorities
reached a staff-level agreement on the sixth review of the authorities’
economic reform program supported by the
EFF arrangement
. The completion of this review will bring the total IMF disbursements
since the start of the program in 2020 to SDR 1300 million (around US$1750
million). This agreement is subject to approval by the IMF’s management and
the Executive Board.
“Despite a challenging global and regional environment, Jordan has
maintained macroeconomic stability and access to international capital
markets through prudent monetary and fiscal policies. As a result, the
program remains firmly on track, with key program targets met and continued
strong progress on structural benchmarks. The central government reduced
its primary deficit (excluding grants) by 0.8 percent of GDP in 2022, to
3.7 percent of GDP, by taking timely measures to offset the higher cost of
subsidies. Meanwhile, the CBJ has successfully maintained monetary and
financial stability. It remains committed to the peg and has raised policy
rates in line with the U.S. Federal Reserve. As a result, inflation has been
relatively moderate and has started to decline. The banking system remains
well-capitalized and liquid, as also confirmed by the recent Financial
System Sustainability Assessment.
“The post-pandemic recovery continues, with real GDP expected to grow by
2.6 percent in 2023. Inflation is on track to moderate to 2.7 percent in
2023, due to an appropriately monetary policy stance. Medium-term growth is
projected to increase to 3 percent, although uncertainty surrounding the
global outlook is high.
“Moving forward, continued prudent policies remain critical to preserving
macro-economic stability. The government aims to further reduce the central
government primary deficit to 2.9 percent of GDP in 2023, with a view to
gradually reducing public debt to 80 percent of GDP by 2028, through
continued efforts to broaden the tax base, and by improving the efficiency
of public spending. Continued efforts to tackle the deficits in the
electricity sector are also essential to safeguarding fiscal
sustainability. Monetary policy will need to continue prioritizing
safeguarding the peg, backed by adequate international reserves.
“With unemployment still high, at 22.9 percent, and particularly among the
youth and women, structural reforms are essential for achieving strong and
inclusive growth and creating more jobs. This includes enhancing the ease
of doing business, and reducing the cost of doing business, promoting
competition, increasing labor market flexibility, and enhancing governance
and transparency. While progress has been made in these areas, more is
needed to create a more dynamic private sector, attract more investment,
and create job-rich economic growth. Continued concessional support from
donors is crucial, particularly to assist Jordan in continuing to host
refugees.
“The mission would like to thank our counterparts for an open and
collaborative dialogue. The mission met with the Prime Minister, the Deputy
Prime Minister for Economic Affairs, the Minister of Finance, the Minister
of Planning and International Cooperation, the Minister of Energy and
Mineral Resources, the Minister of Industry and Trade and Labor, the
Governor of the Central Bank of Jordan, Members of Parliament, other
cabinet ministers and officials, donors, and representatives of the private
sector and civil society.”