| 8 December 2021, Wednesday |

Jordan’s economy continues to recover on fiscal measures and rapid vaccination programme

According to the International Monetary Fund, Jordan’s economy is still recovering from the effects of the coronavirus pandemic, thanks to fiscal and monetary measures as well as an accelerated vaccination program.

The country’s economy is expected to grow by 2% in 2021 and 2.7% the following year, according to the IMF, following a staff-level agreement on the third review of Jordan’s economic reform program under the Extended Fund Facility arrangement.

“Despite the challenging circumstances brought on by the pandemic,” the IMF said, “sound policies have helped maintain macroeconomic stability.”

“The government is on track to reduce its fiscal deficit by 1% of GDP in 2021, owing to strong revenue collection and a significant institutional effort to combat tax evasion and improve tax compliance.”

Robust monetary policy and external financing also aided the country in keeping reserves at a “comfortable level,” according to the report.

As public debt and unemployment rise, the kingdom is attempting to overhaul its economy and cut state subsidies, relying on foreign aid and grants to finance its fiscal and current account needs. It also intends to increase oil production and expand its non-oil economy.

“Jordan’s standing in international markets remains strong, with spreads low compared to peers in the region,” according to the Washington-based lender.

According to Bloomberg’s vaccine tracker, Jordan had administered 7.72 million doses as of Friday, covering more than 76% of its total population.

The country still faces challenges as a result of its high unemployment rate, according to the IMF.

Due to higher fuel import prices and increased intermediate imports, the country’s current account deficit is expected to rise to around 9.5 percent of GDP in 2021, but it is expected to fall to less than 5% in 2022.

According to the IMF, Jordan’s banking system is “well-capitalized and liquid,” and non-performing loans remained low in the first half of 2021.

The country also made significant progress in improving the anti-money laundering and counter-terrorism financing regimes, including enacting a new AML/CFT law to better align with FATF (Financial Action Task Force) standards.

The Financial Action Task Force (FATF) is an intergovernmental organization founded by the Group of Seven countries to combat money laundering around the world.

Jordan is home to 1.3 million Syrian refugees, and “robust concessional support from donors” is still needed, according to the statement.

Total IMF disbursements, including those made under the Rapid Financing Instrument, are expected to total $1.95 billion between 2020 and 24. This comes on top of the $469 million Jordan received in August as part of the IMF’s General SDR (Special Drawing Rights) allocation.