Jordan achieves targets set in 2nd IMF review

AMMAN — Jordan has achieved all the targets that were set in the second review under $1.3 billion Extended Fund Facility (EFF) arrangement and has maintained the pace of reforms, said Jihad Azour, director of the International Monetary Fund (IMF) Middle East and Central Asia Department.

The IMF is supporting Jordan’s reform agenda that was initiated last year with the objective of maintaining macroeconomic stability and reforming the economy to accelerate the level of growth, Azour said in an online press conference.

Commending Jordan for maintaining the pace of reforms, he said those reforms are targeted to reduce the cost of labour, reduce the cost of financing and reduce the cost of energy to allow the economy to grow at a faster pace.

Late March, an IMF team led by S. Ali Abbas, concluded virtual discussions with Jordanian authorities and reached a staff-level agreement on the second review of the authorities’ economic reform programme supported by the EFF arrangement.

At the end of the review, the IMF staff voiced support for Jordanian's request for an augmentation of access under the EFF by $200 million in light of the higher financing needs for the country.

The Kingdom’s four-year EFF of SDR 926.37 million (about $1.3 billion, equivalent to 270 per cent of Jordan’s quota in the IMF) was approved by the IMF’s board on March 25, 2020.

Highlighting Jordan's measures to lessen the impact of coronavirus on businesses and the public, Azour said that the impact of the coronavirus has affected Jordan’s economy.

The government has responded quickly with a certain number of reforms and measures that were targeted to protect lives by increasing the medical capacity and recently by accelerating the vaccination, he said.

Jordan also introduced a number of fiscal measures to alleviate the pressure on the livelihood of people, among other measures, he said.

During the press conference, Azour said that the IMF has reached a staff-level agreement based on the reform programme that Jordan has put in place.

The objective of the second review was to support two actions: Protecting lives and livelihood, and preparing for the recovery, he said.

The programme aims to support the reforms in Jordan by improving business environment, increasing access to labour, access to finance by reducing the labour cost and reducing energy cost. It also seeks to improve governance and reduce the cost of doing business, he said

The programme has supported Jordan in modernising the tax system in order to widen the coverage and reduce the various loopholes, but doesn’t have any action in terms of increasing the tax rate, he said.