AMMAN —
Standard & Poor's credit rating agency anticipates an
average GDP growth rate of 3 percent for Jordan during the years 2023-2026.
This assessment aligns with Jordan's success in maintaining its
credit ratingat 'B+/B' with a stable outlook. Inflation in Jordan is expected to
significantly ease, following a 2.7 percent price increase in the first seven
months of 2023, compared to an annual average of 4.2 percent in 2022. The
forecasted average inflation rate is 2.6 percent from 2023 to 2026.
اضافة اعلان
The agency also predicts a 2.8 percent growth
in the Jordanian economy for the current year, attributing this positive
outlook to the structural reforms initiated by the government. Efforts to
manage inflation include maintaining the peg of the
Jordanian Dinar to the US Dollar, Al Mamlaka TV reported.
Strategic food stockpiling and long-term gas
import contracts have contributed to relative stability in food and
household energy costs.
These measures have collectively mitigated
some of the impacts of fluctuations in basic commodity prices over the past
year.
International supportIn June 2023, the
International Monetary Fund (IMF) successfully completed its sixth review of Jordan's Extended Fund
Facility program, which commenced in 2020. Jordan continues to receive ongoing
technical and
financial support from the IMF.
Furthermore, Jordan has received additional
multilateral and bilateral support from institutions such as the
World Bank,
the European Bank for Reconstruction and Development, the United States, and
the
European Union, among others.
While competition for donor funds is expected
to intensify due to the ongoing conflict in Ukraine, the agency anticipates
further assistance.
Navigating global economic challenges
Jordan's economy has faced numerous
challenges in recent years, including the indirect consequences of the Syrian
conflict, the
COVID-19 pandemic, and the Ukraine crisis.
These events led to an increase in
unemployment rates, a rise in public debt, and persistent pressures stemming
from the hosting of nearly 1.3 million Syrian refugees, accounting for
approximately 11 percent of Jordan's population.
To address these challenges, Jordanian
authorities have prioritized structural reforms, with the support of the IMF.
Progress in financial reforms, particularly in tax compliance, is yielding
positive results. Additionally, plans are underway to address state-owned
enterprises, notably the National Electric Power Company and the Water
Authority.
Losses incurred by the National Electric
Power Company and the Water Authority
The agency expects combined losses for the
National Electric Power Company and the
Water Authority to increase from 1.5
percent of GDP in 2022 to approximately 1.9 percent in the current year. This
rise in losses is accompanied by debt levels reaching about 10.5 percent of GDP
in 2022.
A significant portion of these losses is
attributed to the "expensive" power purchase agreement initially
signed in 2014.
Both entities are presently undergoing
restructuring efforts, with the potential to establish a more financially
sustainable foundation.
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