AMMAN —
The International Monetary Fund (IMF) praised
Jordan's continuous effective policy response to challenging external factors.
This came after the IMF completed its fifth review of Jordan's program
supported by the Extended Fund Facility, the Jordan News Agency, Petra,
reported.
اضافة اعلان
The completion of the
review will make the equivalent of $343 million immediately, bringing the total
IMF disbursements to Jordan since the start of 2020 to about $1.699 billion.
This includes purchasing about $407 million in May 2020 under the Rapid
Financing Instrument.
Jordan's four-year extended arrangement amounting to the
equivalent of $1.293 billion, or about 270 percent of Jordan's quota in the
IMF, was approved by the IMF's Board on March 25, 2020. It was later amended on
June 30, 2021, to reach around $1.494 billion, equivalent to 312 percent of
Jordan's quota in the IMF.
According to an IMF
statement, its stepped-up donor support was crucial to helping Jordan navigate
the struggles of elevated commodity prices and tightening global financial
conditions as it continues to shoulder the responsibility of hosting 1.3
million Syrian refugees.
It added that continued
post-COVID recovery and positive spillovers
from the region led to stronger growth in 2022–23. However, the medium-term
outlook is weighed down by elevated commodity prices, tightening financial
conditions, and a slowing global economy.
According to the IMF, GDP growth is projected to remain at
around 2.7 percent in 2022–23, up from 2.4 percent in the fourth review.
Inflation, projected at 4.4 percent for 2022, has increased but remains
moderate and should ease in the period ahead.
The banking system remains resilient to shocks, it said.
In terms of electricity, the IMF said that financial
challenges in the electricity sector are exacerbating fiscal pressures as
subsidies have increased considerably on the back of high international
commodity prices.
Unemployment for
Jordanians remained elevated at 22.6 percent in 2022, with youth unemployment
showing some decline but remaining high at nearly 50 percent. The statement
added that the IMF's financial support seeks to alleviate some of these
struggles.
Following the Executive Board discussion, Deputy Managing
Director and Acting Chair Kenji Okamura said: "Fiscal performance has been
strong, on the back of sustained legislative and administrative reforms to
reduce tax evasion and avoidance."
"The authorities
have also replaced untargeted and fiscally unaffordable fuel subsidies with
cash transfers to protect the most vulnerable segments," Okamura added.
He noted that the planned gradual fiscal consolidation and
efforts to improve public investment management and monitor fiscal risks would
continue to support debt sustainability.
"Monetary policy
is appropriately anchored in safeguarding the peg. The financial sector remains
healthy, and the Central Bank of Jordan continues to closely monitor banks'
asset quality. Subsidized lending schemes should become more targeted and be
gradually phased out as the
recovery entrenches," Okamura explained.
To further enhance
the AML/CFT regime, Okamura said, the authorities are committed to implementing
the remaining items in the action plan to exit the FATF's watch list.
The IMF official
underlined that electricity and water sector reforms are critical for
preserving the sustainability of public finances.
"Timely
implementation of the action plan prepared in consultation with development
partners is key to credibly reduce NEPCO's deficits. Strong policy efforts are
also needed to address water scarcity and the persistent losses and arrears of
the water sector. To this end, the recent adoption of the financial
sustainability roadmap for the water sector is welcome," Okamura added.
"Achieving
strong and inclusive growth rests on steady progress on structural reforms to
support female labor force participation, enhance youth employment and labor
market flexibility, promote competition, reduce the costs of doing business,
and strengthen governance and transparency," Okamura concluded.
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