AMMAN — Jordan's economy is projected to grow by 2
percent this year, with a near-full economic reopening this summer, the
International Monetary Fund (IMF) said on Tuesday, slightly lowering its
previous forecast of 2.5 percent, according to the Jordan News Agency, Petra.
اضافة اعلان
In a report following the conclusion of the Second Review
Under the Extended Arrangement Under the Extended Fund Facility, the IMF said
Jordan has successfully maintained macroeconomic stability, notably by meeting
all key fiscal and reserve targets and made very strong progress on a large
number of critical structural reforms.
The country’s early success in containing the spread of
COVID-19 has been challenged by two subsequent waves of the pandemic, the IMF
said, adding that timely and effective fiscal and monetary policy responses
helped contain the contraction in activity to 1.6 percent in 2020, shallower
than the 3 percent expected at the first review.
Still, it indicated, unemployment surged to a record 25
percent in the last quarter of 2020, with youth unemployment at 55 percent.
The
impact on fiscal and external balances has been significant, with public debt
reaching 88 percent of GDP at the end of 2020, Petra reported.
Nonetheless, despite the challenges from new virus variants
and weaker tourism prospects, macroeconomic stability has been maintained,
thanks to Jordan’s proactive policy stance, the IMF affirmed.
All quantitative performance criteria (QPCs) were met, and
most indicative targets have also been met.
Progress on structural benchmarks
due for this review has been strong, including on streamlining the granting of
tax incentives and closing tax loopholes.
Regular information on COVID-related
spending is being published, and an IMF Fiscal Transparency Evaluation was
recently undertaken, the IMF report read.
In light of the weaker outlook for 2021, the report said
that IMF staff supports the government’s request for modification of the
end-June 2021 QPCs to allow adequate space to protect the recovery, expand the
social safety net, and address high unemployment.
The pandemic has significantly increased Jordan’s external
financing needs (by about $1.1 billion in 2021–22), mainly due to weaker
tourism and services receipts, underscoring the necessity of continued donor
financing, including to support Syrian refugees.
Moreover, Jordan’s vaccination
program, one of the first in the world to cover refugees, has recently
accelerated, according to Petra.
"Monetary policy has been appropriately accommodative
since the onset of the pandemic while supporting the peg.
Moving forward,
monetary policy needs to remain flexible and data-driven, balancing the need to
entrench the recovery and maintain monetary and financial stability.
While the
financial sector remains sound, continued vigilance is warranted given that it
will likely take time for the full effects of the pandemic to be reflected in
banks’ asset quality," the report said.
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