Jordan and IMF Reach Staff-Level Agreement on Third EFF Review
اضافة اعلان
A staff team from the International Monetary Fund (IMF), led by Ron van Rooden, concluded a mission to Jordan on April 17 following discussions held from April 6 to 17 as part of the third review under Jordan's economic reform program supported by the Extended Fund Facility (EFF).The arrangement was initially approved by the IMF Executive Board on January 10, 2024. The mission also engaged in initial discussions regarding a prospective arrangement under the IMF's Resilience and Sustainability Facility (RSF).At the end of the mission, van Rooden announced that the IMF team and the Jordanian authorities had reached a staff-level agreement on the third review. Subject to approval by IMF management and the Executive Board, the agreement would make available SDR 97.784 million (approximately USD 130 million), out of a total program size of SDR 926.370 million (about USD 1.2 billion)."Program performance continues to be strong, despite a challenging external environment," van Rooden said in a statement. "All quantitative performance criteria for the third review were met, and steady progress is being made toward achieving the program's overall objectives, including key structural benchmarks."Jordan's economy has shown notable resilience amid regional instability, including the ongoing conflicts in Gaza and Lebanon and heightened global uncertainty.According to the IMF, the country maintained macroeconomic stability in 2024, achieving 2.5% GDP growth and keeping inflation under 2%. Fiscal performance remained solid, with the budget deficit target met through strong policy measures despite a decline in domestic demand and export prices.Looking ahead, growth is projected to accelerate to 2.7% in 2025, driven by a recovery in domestic economic activity, a rebound in tourism, and increased foreign investment inflows.The current account deficit is expected to narrow to 5.5% of GDP, supported by rising tourism receipts. Inflation is anticipated to remain contained at slightly over 2%, consistent with the Central Bank of Jordan's (CBJ) continued commitment to monetary stability.The CBJ also reiterated its firm commitment to the exchange rate peg to the U.S. dollar, backed by ample international reserves.Jordan's banking sector remains sound and well-capitalized, reinforcing financial system stability. In the absence of further external shocks, the IMF projects growth could exceed 3% in the coming years, supported by large-scale investment projects, such as the Aqaba-Amman Conveyor Project, and opportunities for greater regional economic integration with neighboring countries, including Syria, Lebanon, and Iraq.The Jordanian authorities remain focused on a gradual and sustained fiscal consolidation path, aiming to reduce public debt to 80% of GDP by 2028.This strategy will be pursued while safeguarding priority social and development expenditures. To that end, efforts to mobilize domestic revenues, improve spending efficiency, and ensure the financial sustainability of public utilities and the Social Security Corporation will continue.The IMF also acknowledged the authorities' commitment to advancing structural reforms aimed at fostering stronger growth and job creation, particularly to address high unemployment among youth and women.Reform priorities include improving the business climate, enhancing competition, increasing labor market flexibility, and expanding the social safety net. Additionally, the government plans to further streamline regulations and digitize public services, including tax and customs administration.Substantial progress was also made in policy discussions aimed at addressing Jordan's long-term structural vulnerabilities in the water and electricity sectors, and improving health system resilience to respond to future public health emergencies.These issues could be supported under a future RSF arrangement, with discussions expected to resume in Washington, D.C. in the coming days.The IMF team expressed its appreciation to the Jordanian authorities for their open and constructive engagement during the mission. Meetings were held with Prime Minister Jafar Hassan, Minister of Finance Abdelhakim Shibli, Minister of Planning and International Cooperation Zeina Toukan, Minister of Economic Affairs Mohannad Shehadeh, Central Bank Governor Adel Al-Sharkas, as well as other senior officials from the government and the Central Bank of Jordan.The IMF staff will submit their findings to IMF management and the Executive Board for consideration and final decision.Petra
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