IMF conditions for deal tough, ‘but we will make it’ — minister

AMMAN — Jordan is expected to reach an agreement on the Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF) in July, Minister of Finance Omar Malhas said Monday.

Under the programme, the IMF will deposit $700 million to $800 million in the Central Bank of Jordan (CBJ), the minister told The Jordan Times on the sidelines of the Euromoney Jordan Conference on Monday.

“Negotiations will start with the IMF on May 17th and we expect to seal the deal in July this year…This is very important for us,” said Malhas.

“The agreement will help us obtain financing from donor countries and international agencies as well,” said the minister.

The IMF conditioned that Jordan reduces public debt as a percentage to the gross domestic product (GDP) from 93 per cent currently to 80 per cent by 2021.

Jordan’s public debt reached JD24.9 billion at the end of January this year, representing around 93.6 per cent of GDP, according to Finance Ministry figures.

“This will not be an easy task, but we will do it,” said Malhas.

The EFF will include fiscal reforms and structural adjustments. It includes increasing the percentage of women in the labour market, reducing unemployment among the youth, improving the business environment and amending relevant laws and legislation.

“We will need more reforms to trigger economic growth,” said the minister.

In August last year, Jordan and IMF concluded the three-year Stand-By Arrangement (SBA), which gave the Kingdom access to around $2 billion.  

On economic outlook for 2016, the minister said: “This is going to be a tough year for Jordan.”

“Our forecast for economic growth is around 2.7 per cent this year, which is below the 3.5 per cent forecast in the state budget,” said Malhas.

“In light of uncertainties and regional conflicts, it is going to be a difficult year. Economic growth this year is not going to be at comfortable levels. It will be below expectations,” said the minister.

“There is a decline in the number of tourists and a drop in remittances by Jordanians, coupled with dwindling exports and foreign direct investments,” said Malhas, noting also that the borders with Syria and Iraq, which used to be lucrative markets, are closed, let alone that Syria was a vital route for Jordanian products bound for Europe.

Jordan needs an economic growth of about 5 per cent, which is double the population growth, to be able to create more jobs and address unemployment, said the minister, stressing on the need to focus on vocational training and adopting practices and policies to render the Jordanian economy more competitive.