Last IMF review testifies to the strength of local economy — Sharkas

Adel Sharkas
Central Bank Governor Adel Sharkas.(File photo: Jordan News)
AMMAN — Central Bank Governor Adel Sharkas said on Friday that Jordan’s strong commitment to economic reform has boosted the international community’s confidence in the Kingdom’s economy and enabled it, for the fifth time, to reach an agreement with IMF experts who conducted its performance review. اضافة اعلان

In an interview with Jordan Television, Sharkas stressed that the positive results of the review send the clear message that this most important international financial institution has confidence in the soundness of Jordan’s economic approach and the stability of its macroeconomic, financial and monetary situation.

According to Sharkas, the review’s promising results led the fund to raise its outlook about the performance of the Jordanian economy for this year to 2.7 percent; the figure stood at 2.4 percent after the last review.

This, he said, was possible even though the IMF had reduced its forecast for the global economic growth due to continuing imbalances in supply chains, geopolitical developments, and uncertain global conditions.

Sharkas also said that Moody’s decision to raise its expectation for Jordan from stable to positive, while fixing the credit rating at B1, is yet another testimony to the strength and stability of the national economy, even more encouraging when seeing that the credit rating company downgraded its rating of many countries around the world.

Sharkas said that the national economy is on the right path toward recovery from the repercussions of the coronavirus pandemic; it achieved a 2.2 percent growth rate during 2021, while in the first quarter of 2022 it recorded a growth rate of 2.5 percent.

He added that the growth rate rose to 2.9 percent in the second quarter of the year, across all economic sectors, and especially so in those more seriously affected by the pandemic, such as tourism, transportation, and manufacturing industries.

This, he said, indicates that these sectors were able to restore the momentum for growth; what’s more, this positive performance came despite the state of uncertainty that the world is experiencing today as a result of inflation and the Russia-Ukraine war.

Sharkas stressed the importance of the economic modernization vision, which is a cross-government roadmap that should promote the economic performance during the next 10 years.

He indicated that the inflation rate in the Kingdom remains at moderate levels, despite the inflationary wave that the world is experiencing. It reached 4.1 percent during the first 10 months of this year, which is lower than the inflation rate prevailing in many developed countries.

He noted that the measures taken by the government contributed to alleviating inflationary pressures during the first half of the year. Among the measures: adopting cost caps for the transportation of imported goods, for the purpose of calculating taxes and customs duties, stabilizing the prices of oil derivatives until the end of April 2022, maintaining the cost of public transport, and stabilizing bread prices despite the rise in wheat prices globally.

Regarding the banking sector situation, Sharkas stressed that it is sound, solid, able to withstand shocks, and of efficiently manage risks, as a result of maintaining high levels of capital and liquidity.

According to him, banking sector indicators showed improved performance during 2021, an improvement that continued during the current year, increasing the balance of total credit facilities by 7.7 percent during the first three quarters of this year, to reach JD32.3 billion, and increasing deposits by 5.8 percent, to reach JD41.8 billion.

Sharkas also stressed the safety and strength of the Jordanian dinar, backed by high foreign reserves at the Central Bank, which currently stand at $16 billion. He stressed the Central Bank’s full commitment to linking the Jordanian dinar to the US dollar, and assured that the bank has the tools needed to maintain the local currency’s stability and the attractiveness of savings in Jordanian dinars.

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