The International Monetary Fund (IMF) Executive Board has concluded its 2024 Article IV consultation and second review under the Extended Fund Facility (EFF) with Jordan. This development allows for an additional SDR 97.784 million, approximately US$130 million, to be disbursed to Jordan, increasing total disbursements to SDR 339.67 million or about US$453 million.
Despite challenges posed by regional conflicts, Jordan's economy has demonstrated resilience, maintaining macroeconomic stability and low inflation. The IMF attributes this resilience to sound economic policies and reform progress alongside substantial international support. "Jordan’s economy continues to show resilience in the face of the regional conflict," stated Mr. Okamura, Acting Chair and Deputy Managing Director.
However, ongoing conflicts are impacting Jordan's economic growth more than initially expected, with a projected growth rate decline from 2.7 percent in 2023 to 2.3 percent in 2024. While net exports are improving, domestic demand remains weak, affecting government finances as well.
Inflation is expected to remain low at around 2 percent due to the Central Bank of Jordan's commitment to monetary stability and an exchange rate peg. The country's external position remains robust despite a slight widening of the current account deficit.
Government revenues have been hit by reduced domestic demand and falling export commodity prices. Authorities are taking measures to address these shortfalls while planning gradual fiscal consolidation in 2025.
Okamura emphasized continued efforts towards fiscal sustainability: "Efforts should continue to further enhance revenue mobilization and spending efficiency." He also highlighted the importance of structural reforms for job creation and economic growth: "Sustained progress in implementing structural reforms...is crucial."
An updated press release will provide more details on the Article IV discussions.