A staff team from the International Monetary Fund (IMF) concluded discussions in Amman regarding the third review under the IMF's Extended Fund Facility (EFF) and potential support under the Resilience and Sustainability Facility (RSF). These discussions were part of the arrangement approved by the IMF's Executive Board on January 10, 2024. The team was led by Ron van Rooden.
In a statement, van Rooden announced that the IMF team and Jordanian authorities reached a "staff-level agreement on the third review of the authorities’ economic reform program supported by the EFF arrangement, approved in January 2024." He emphasized that "program performance continues to be strong, despite a challenging external environment."
The agreement's approval will make SDR 97.784 million (about US$130 million) available to Jordan from the total program amount of SDR 926.370 million (about US$1.2 billion). The IMF noted that Jordan's economy shows resilience, maintaining macro-economic stability in the face of conflicts in Gaza and Lebanon. This stability has been attributed to "authorities’ steady pursuit of sound macro-economic policies and international support."
Despite slowed growth, Jordan achieved a rate of 2.5 percent, with inflation remaining below 2 percent in 2024. The budget deficit target was also met. Looking forward, growth is projected to increase to 2.7 percent in 2025, as domestic activities, tourism, and investment inflows rise. The banking sector maintains its strength, supported by strong international reserves and a committed exchange rate peg to the U.S. dollar.
Van Rooden stated that the Jordanian authorities aim to "place public debt on a steady downward path while protecting priority social and development spending." The plans include revenue mobilization, spending efficiency improvements, and maintaining the financial health of public utilities. Their aim is to reduce public debt to 80 percent of GDP by 2028.
Additionally, reforms are to be accelerated to foster job creation amidst high unemployment rates, particularly among youth and women. There is a focus on improving the business environment through enhanced competition and labor market flexibility. Discussions are set to continue to firm up policies under the RSF to tackle long-term vulnerabilities, especially in the water and electricity sectors.
The IMF team expressed gratitude for the "candid and constructive discussions" held with Jordanian officials, including meetings with Prime Minister Bisher Al-Khasawneh, Minister of Finance Mohamad Al-Ississ, and others.