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'Jordan endures expected impact of Gaza war, thanks to its economic resilience, progress'

By JT - Jan 31,2024 - Last updated at Jan 31,2024

AMMAN — The resilience and progress of the Jordanian economy in recent years, has enabled it to weather the expected impact of the war on Gaza, Jihad Azour, director of the International Monetary Fund (IMF) Middle East and Central Asia Department, said on Wednesday. 

Speaking at a press conference to discuss the economic outlook for the Middle East and North Africa region, Azour stressed the importance of the Jordanian authorities adopting effective fiscal and monetary policies to mitigate the risks associated with the prolonged conflict.

He highlighted the recent agreement between the government and the IMF, saying that it had facilitated the implementation of economic and financial measures, strengthened the resilience of public finances and improved Jordan's borrowing prospects at favourable interest rates. 

These achievements are based on successful economic reforms and continued commitment to reforms under the programme, which are expected to improve macroeconomic conditions and gradually reduce financing costs, he noted.

The IMF report forecasts a drop in Jordan's economic growth in 2023 and 2024, with growth expected to hover around 2.6 per cent in both years, down slightly from previous projections of close to 3 per cent in 2024.

A recent IMF report described the Israeli war against Gaza as a significant shock to the MENA region, worsening existing economic challenges and causing significant humanitarian suffering.

It noted that recent regional developments have led to a downward revision of growth projections for the region, by 0.5 percentage points to 2.9 per cent for the current year. 

The report also expected continued negative growth in the region's low-income countries and a general decline in inflation in most economies, albeit with price pressures in some cases due to specific national circumstances.

The IMF underlined the importance of maintaining the focus of monetary policy on price stability and urged tailored fiscal policy designs that take into account the specific needs and fiscal capacities of each country.

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