IMF disburses $130 million in funds to Jordan

Latest payment is part of Amman's $1.2 billion extended fund facility

The IMF's spring meetings will take place from April 21 to April 26. Bloomberg

The International Monetary Fund has announced it has disbursed about $130 million to Jordan as part of its extended fund facility (EFF).

The Washington-based lender approved its EFF with Jordan – valued at roughly $1.2 billion – last year.

“All quantitative performance criteria for the third review were met and steady progress is being made towards achieving the programme’s overall objectives, including strong progress towards meeting the structural benchmarks for this and future reviews,” IMF mission chief Ron van Rooden said in a news release on Thursday.

IMF mission chief Ron van Rooden. Photo: IMF

The EFF helps provide financial assistance to countries facing serious problems with medium-term balance of payments because of the length of time it takes to address structural weaknesses.

Despite facing “considerable external headwinds” from the conflicts in Gaza and Lebanon, the fund said Jordan's economy has remained resilient. Tourism and domestic demand are also showing signs of recovery, the fund said.

The IMF projects Jordan's economy to grow by 2.7 per cent this year after slowing somewhat to 2.5 per cent last year.

“Despite increased global uncertainty, including as a result of higher trade tensions and continued conflicts in the region, growth in Jordan has started to pick up pace,” the IMF said.

The IMF expects growth to surpass 3 per cent in the coming years due to economic integration with Syria, Lebanon and Iraq, as well as large investment projects.

Inflation is expected to reach slightly more than two per cent. The IMF also said Jordan's budget deficit target was met, “as strong measures offset the loss in revenue due to lower domestic demand and lower prices of key export commodities”.

The fund also said Amman made “substantial progress” in discussing its long-term vulnerabilities in the water and electricity sectors.

However, Jordan is at risk of a sharper economic slowdown this year, because it is the most dependent on US exports among countries in the Middle East and North Africa, making it the region's most exposed nation to US tariffs, BMI said in a report this month.

The Washington ally is subject to a 20 per cent levy on exports to the US, despite the free trade agreement between the countries that has been in place since 2010, which could hamper its economic growth and widen its current account deficit, the report said.

The Fitch company forecasts Jordan's economy will grow 2.1 per cent in 2025, down from 2.2 per cent last year.

"Within the Mena region, Jordan is the economy most dependent on exports to the US, followed by Israel, Libya, Iraq, Bahrain and Tunisia," BMI said.