Jordan has taken "important steps" to improve its fiscal transparency over the last decade, the International Monetary Fund has said.
The fund said there is "room for improvement" in its current ratings.
Jordan’s performance is generally better on fiscal reporting than on forecasting and budgeting, and on fiscal risk analysis and management, the Washington-based lender said in a 69-page technical report on the country's fiscal transparency evaluation.
The IMF carried out a remote Fiscal Transparency Evaluation between March 31 and April 26 at the request of Jordanian Minister of Finance Mohamad Al Ississ.
"Notably, there is a comprehensive legal framework for the management of public finances," the report said. "Fiscal reports have become more comprehensive and cover a high proportion of public sector institutions. The frequency of in-year reporting is at an advanced level, as is the timeliness of publication of the government’s annual financial statements."
Jordan's economy is forecast to grow by 2 per cent this year as the gradual return of tourists, Covid-19 vaccination efforts and rising global demand support a rebound in the second half of 2021, according to the latest forecast by the IMF. The forecast is little changed from 2020 and slightly lower than earlier projections of 2.5 per cent growth after a slow start to vaccination campaigns, weaker balance sheets and tourism sector challenges, it said.
Jordan scored above the global average for fiscal transparency in the 2019 Open Budget Survey, and is the only country in the region ranked overall as ‘green’ on this measure. The survey provides a snapshot of government practices in 117 countries related to budget disclosure, opportunities for public engagement and checks and balances on the budget process.
Although many aspects of Jordan's fiscal transparency practices are sound, the IMF evaluation report highlights several areas where they could improve.
For example, while fiscal reports are published, they are "somewhat fragmented and based on different standards" and they differ in terms of institutional coverage, flows and stocks, and the basis of accounting, the IMF said. Also there is no report that provides a comprehensive, consolidated view of public sector finances, it said.
Jordan's macroeconomic forecasts have a "substantial optimistic bias" (an average deviation of 35 per cent in the GDP forecasts since 2007) resulting in large errors in the revenue projections that underpin the budget, the IMF added.
The IMF evaluation report suggested 12 key recommendations to further improve fiscal transparency in the kingdom.
These include improving the presentation, classification, timeliness, and quality of fiscal reports for the general government sector, the report said.