IMF completes final review of economic programme in Jordan

The IMF has completed the seventh and final review of Jordan’s economic programme supported by a standby arrangement (SBA), the fund said.

The completion of the final review enables the disbursement of SDR284.1 million (Dh1.45 billion). The three-year SBA in the amount of SDR 1.364bn was approved by the fund in August, 2012.

“Jordan’s fund-supported programme has helped the country to successfully weather severe external shocks, including the conflicts in Syria and Iraq. Gradual fiscal consolidation, aided by lower oil prices, ensured that public debt is expected to start stabilising this year and, together with a prudent monetary policy, has preserved macroeconomic stability and supported confidence,” said Mitsuhiro Furusawa, the IMF’s deputy managing director.

“Although growth has slowed down in the first quarter of this year, the current account deficit is narrowing, foreign reserves remain at an adequate level, and inflation is low,” he said.

“Policies are on track to meet their 2015 targets. Fiscal structural reform is moving forward, financial policies are appropriately focused on further enhancing the resilience of the sector, and progress is also being made toward fostering private sector development.

However, Mr Furusawa said the were still hurdles to overcome.

“Significant challenges remain. Although major efforts have already been made, continued public sector adjustment is needed to put the high public debt firmly on a downward path, including through steadfast implementation of the energy strategy. With the 2015 budget well on track, the focus should be on identifying early the measures that will underlie the necessary 2016 budget adjustment.

And he reiterated the importance of boosting employment.

“There is also a need to move on structural reforms geared to job creation, and focused on labour market reform as well as improvements in the business climate and the quality of public institutions. Vision 2025 — a 10-year framework for economic and social policies — is an opportunity to address these challenges, and an important step will be to anchor it in a medium-term macro-fiscal framework,” Mr Furusawa said.

“Close fund engagement with Jordan will continue, including through post-programme monitoring.”

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