Jordan reaches agreement with IMF on $1.2bn support package

Jordan would have immediate access to about $190m after board approval in January

A stallholder arranges his fruits and vegetables at a market in Amman. Reuters

The International Monetary Fund has reached a staff-level agreement with Jordan for a 48-month extended fund facility worth about $1.2 billion, which will support the economic and structural reform programmes.

The new EFF will replace the existing arrangement that was set to expire in early 2024.

Over the past years, the Jordanian authorities’ performance under the existing EFF was “consistently strong” as it maintained its macro-economic stability.

The new programme will support Jordan as it “weathers new shocks, with focus on continuing with fiscal consolidation to place public debt on a steady downward path, safeguarding monetary and financial stability, and accelerating structural reforms to support growth and enhance job creation”, the IMF said on Thursday.

“It builds on the strong performance under the existing programme,” said Ron van Rooden, the IMF’s mission chief for Jordan.

"All commitments that had been set for the seventh review have been met, including several ahead of schedule."

The new agreement is subject to IMF management approval and consideration by the executive board, which are expected in January.

On board approval, Jordan would have immediate access to about $190 million.

“The external environment remains challenging,” Mr van Rooden said.

“Global and regional tensions are high, interest rates are expected to remain higher for longer, and global growth is unevenly distributed.

"The conflict in Gaza and Israel poses yet another risk to the region and could adversely affect Jordan’s economy.”

Jordan’s economy is expected to grow by 2.6 per cent in 2023, continuing a post-pandemic recovery, with strong performance across all sectors in the first three quarters, based on IMF estimates.

Fitch Solutions raised its 2023 forecast for Jordan’s real GDP to 2.8 per cent from 2.6 per cent on the expectation of stronger private consumption and export growth.

Fiscal policy under the new programme will be anchored by the goal to place public debt on a “steady downward” path, bringing it to below 80 per cent of the gross domestic produce by 2028, the IMF said.