Nabateans – The International Monetary Fund confirmed that Jordan continues to recover on a large scale amid a difficult external environment, thanks to the effective policy response of the authorities.
In light of the Fund’s Executive Board completing the fifth review of the Jordaan program supported by the Extended Fund Facility, he emphasized the need to focus policy on maintaining macroeconomic and financial stability, protecting of the vulnerable and promoting reforms to promote employment, growth and competitiveness. .
The Fund has indicated that, in light of the completion of the review, the equivalent of 257.325 million Special Drawing Rights (approximately 343 million US dollars) will be immediately made available to the Kingdom.
This brings total IMF disbursements to Jordan since the beginning of 2020 to SDR 1.276 billion (about US$1.699 billion), including the purchase of SDR 291.55 million (about US$407 million) in May 2020 under the Instrument Quick- financing.
Jordan’s four-year arrangement, equivalent to SDR 926.37 million (about $1.293 billion, equivalent to 270 percent of Jordan’s share in the International Monetary Fund), was approved by the IMF Board on March 25, 2020 and increased on June 30, 2021 . , the equivalent of 1,070.47 million Special Drawing Rights (about $1.494 billion, equivalent to 312 percent of Jordan’s share in the International Monetary Fund).
The Fund indicated the importance of increasing donor support to help Jordan overcome negative external shocks from rising commodity prices and tightening global financial conditions as it continues to bear the burden of hosting 1.3 million Syrian refugees .
He pointed out that the continued recovery after the Corona virus and the positive repercussions of the region led to stronger growth in 2022-2023, and explained that the expectations in the medium term are affected by the rise in commodity prices, the tightening of financial conditions , and the slowdown in the global economy.
He expected GDP growth to remain at around 2.7 percent in 2022-2023, up from 2.4 percent in the fourth review, indicating that the expected inflation rate has risen to 4.4 percent for 2022, but it is still moderately and is expected to in the coming period. , praising the resilience of the Jordanian banking system to withstand shocks.
He noted that financial challenges in the electricity sector will exacerbate financial pressures as subsidies have increased significantly due to rising international commodity prices.
And he indicated that unemployment levels for Jordanians are high at 22.6 percent in 2022, with youth unemployment declining somewhat, but it remained high at nearly 50 percent, indicating that the financial support provided to Jordan by the International Monetary Fund will help meet these challenges. and galvanizing support from other development partners, which will be essential to enable Jordan to advance an inclusive recovery and move forward better, while still hosting 1.3 million refugees.
Following the discussion of the Executive Board of Review, Deputy Director General and Acting President Kenji Okamura confirmed that the performance of public finances is strong, against the background of continued legislative and administrative reforms to limit and avoid tax evasion, and emphasized the continuation of the planned gradual fiscal control, in addition to the efforts made to improve public investment management and monitoring Public financial risks, in support of debt sustainability.
With regard to monetary policy, which is led by the Central Bank of Jordan, the Fund indicated that it is appropriately based on protecting the dinar’s peg to the dollar, indicating that the Central Bank of Jordan continues to maintain the quality of closely monitor banks’ assets, and subsidized lending schemes should be more targeted and phased out with recovery taking place, to further strengthen the AML/CFT system, and emphasize the need to commit to implementing the remaining items in the action plan to get off the FATF watch list.
The fund indicated that electricity and water sector reforms are necessary to maintain the sustainability of public finances, and explained that the timely implementation of the action plan prepared in consultation with development partners is essential to reliably reduce the deficit of the National Electric Power Company. therefore, strong political efforts are also needed to address water scarcity and the ongoing losses and arrears of the water sector. To achieve this goal, the Bank welcomed the recent adoption of the roadmap for financial sustainability of the water sector.
And he indicated that achieving strong and inclusive growth depends on accelerating progress in structural reforms to support women’s participation in the workforce, promote youth employment, labor market flexibility, improve competition, reduce the cost of doing business reduce, and improve management and governance. transparency.