IMF approves $700 million to address Jordan's long-term vulnerabilities

Fund also disburses about $134 million upon completion of third review of its External Fund Facility arrangement

IMF managing director Kristalina Georgieva at the Paris Forum on Wednesday. The fund said Jordan has consistently met targets, with economic growth reported at 2.5 per cent last year. AFP

The International Monetary Fund (IMF) approved roughly $700 million to Jordan on Wednesday to address its long-term vulnerabilities.

The funds will be part of the Resilience and Sustainability Facility (RSF) to assist with vulnerabilities in the water and electricity sectors, and to help the country take on public health emergencies.

The 30-month arrangement under the RSF will provide Amman with access to about $700 million. The IMF disburses funds through special drawing rights, an international reserve asset the value of which is based on a basket of five currencies.

Separately, the IMF said Jordan will be given immediate access to special drawing rights of about $134 million upon the third completion of its External Fund Facility (EFF) to support Amman's economic programme.

The fund said Jordan has consistently met the targets under its EFF programme, with economic growth reported at 2.5 per cent last year. The fund said growth this year was so far stronger than previously expected.

The IMF approved the $1.2 billion EFF programme with Jordan last year.

“Jordan continues to maintain macroeconomic stability despite external headwinds from regional conflicts and heightened global economic uncertainty, owing to the authorities’ steadfast pursuit of sound policies and continued strong international support,” said Kenji Okamura, IMF deputy managing director and acting chairman.

In its most recently published Regional Economic Outlook, the fund said it expects economic activity to pick up this year after being affected by the Gaza war.

The IMF projected in the outlook for Jordan's economy to expand by 2.6 per cent this year before accelerating further to 2.9 per cent in 2026. Both projections were lower than previous forecasts, mirroring a broader downwards trend because of tariff uncertainty.

Jordan is also expected to be impacted by reduced foreign assistance following the dismantling of the US Agency for International Development, one of several countries in the region that had relied on the agency for assistance.

The IMF said reforms have helped strengthen Jordan's fiscal sustainability, while further efforts should be made to enhance mobilising revenue and take measures to continue lowering its public debt.

“Efforts should also continue to improve the efficiency and viability of the public utilities to preserve the sustainability of public finances, while improving service delivery,” Mr Okamura said.

The fund also said Jordan should accelerate structural reforms to improve its business environment and attract private investment.

“Strong and timely donor support remains essential to help Jordan navigate the challenging external environment, host the large number of refugees, and meet Jordan’s development objectives,” Mr Okamura said.

The fund said reform measures under the RSF will focus on strengthening the financial sustainability for the energy and water sectors, strengthen fiscal and financial sector resilience, and enhance pandemic preparedness.