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IMF disburses $335 million to Jordan as part of four-year program

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The International Monetary Fund’s (IMF) headquarters in Washington, DC on October 15, 2021.(Photo: AFP)
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AMMAN — The International Monetary Fund (IMF) announced on Monday the disbursement of $335.2 million to Jordan as a part of the country’s four-year, $1.5 billion economic reform loan agreement. This latest installment comes with the approval of the IMF executive board after the successful completion of a third review of the country's four-year program.اضافة اعلان

IMF disbursements to Jordan since the start of 2020 total about $1.23 billion, including a purchase of about $407 million in May 2020 under the IMF’s Rapid Financing Instrument earmarked specifically for the offset of COVID-19 related expenses.

According to the IMF, Jordan’s program remains on track despite heightened spending related to the costs of the pandemic.  Speaking after the conclusion of staff-level agreements on the third review back in November, IMF team leader S. Ali Abbas stated that “preventive actions and a robust vaccination campaign mitigated the effects of recent COVID-19 variants through the summer. Helped by the economic reopening, a recovery supported by targeted fiscal and monetary measures is underway with real GDP growth expected around two percent in 2021.”

This sentiment was confirmed in Monday’s press release by Kenji Okamura, deputy managing director and acting chair of the IMF Executive Board, who stated that “despite challenging circumstances, sound policies have helped maintain macroeconomic stability, and the structural reform momentum has endured. In addition, a robust vaccination campaign helped underpin a gradual reopening of the economy and usher in a nascent recovery.”

Okamura also noted that despite Jordan reaching most of its economic targets, unemployment in the country does remain high, particularly among youth and women, and further acknowledged that Jordan bears a disproportionate economic load in caring for over a million refugees from Syria and other countries in the region.

However, Jordanian economist and investment specialist Wajdi Makhamreh believes that Jordan’s government will use the new IMF disbursement to ease some of these financial burdens.

In response to the news of the latest disbursement, Makhrameh noted that “the quantitative targets have been met, and the government is continuing its progress on reforms. Despite high unemployment, the IMF believes the economic recovery is underway, with real GDP projected to be 2 percent this year and possibly as high as 2.7 percent in 2022.”

He also expressed his belief in the Jordanian government’s genuine commitment to structural reforms and stated that “steady progress on structural reforms to support female labor force participation, enhance labor market flexibility, promote competition, reduce the cost of doing business, and enhance good governance and transparency,” will not only aid Jordan’s recovery but also ensure that it continues to maintain a strong and beneficial relationship with the IMF as a key lender.

Yousef Damra, also a Jordanian economist, noted that the positive review and ensuing disbursement from the IMF contribute to enhancing Jordan’s international reputation, as they show the international community that Jordan is serious in its pursuit to reform and restructure its economy.

He stated that the review led to Jordan’s Fitch credit rating being revised from “negative” to “stable.” Fitch, along with Moody’s and Standard and Poor, is one of the world’s “big three” credit rating agencies, and their evaluations will play a key factor when Jordan seeks to borrow two billion dollars from international markets in the next fiscal year.

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