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Economy after IMF reform programme

Sep 18,2017 - Last updated at Sep 18,2017

The general objective of the economic reform programme agreed upon with the IMF is to get Jordan’s economy beyond the dark tunnel that it finds itself in. Instead, the economy will progress towards the light that shines at the other end of the tunnel.

The question is what the programme promises us if we adhere to its terms and conditions on timely basis.

The IMF tables and projections show that the Jordanian economy will be quite different after three years from now, i.e., when this stage of programme implementation will be over.

The overall picture of the Jordanian economy in 2019 will change in the right direction: economic growth rate will rise to 4 per cent. The GDP in current prices will rise to JD33.5 billion from the present JD26.3 billion.

In that case, the public debt will be allowed to rise to JD28.9 billion, equal to 86.3 per cent of GDP.

Of course, we are still very far from the final target, which is to reduce the debt/GDP ratio to 77 per cent. This ambitious objective is supposed to be reached by the end of 2021.

Reducing budget deficit is a main objective of the programme. 

The deficit is supposed to shrink year after year not only as a ratio of GDP, but also in absolute figures.

If everything goes according to the plan, and the government will not get involved in very costly projects that promise very little, such as the nuclear project, and 2019 will be the first year without budget deficit and with a surplus of JD170 million. 

I am trying to believe it!

Some will say that these are dreams that cannot be realised in such this short period of time. I may not differ too much from this point of view.

What counts, in my view, is to go in the right direction and to approach our required objectives. What cannot be achieved in three years can be reached in five years.

Without the economic reform programme we were heading towards the crisis. With the reform, at least we are not allowing the problem to worsen year after year, as was the case before the programme.

 

Economic reform has a price that must be paid. If you want to produce omelette, you have to break eggs. Unfortunately some populists believe they can eat omelette without breaking eggs.

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