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IMF Reaches a Staff-Level Agreement with Jordan on a Four-Year Extended Fund Facility

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Via IMF (Den Internationale Valutafond)

IMF Reaches a Staff-Level Agreement with Jordan on a Four-Year Extended Fund Facility

January 30, 2020

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.

  • The IMF mission and the Jordanian authorities have reached a staff-level agreement on a new four-year program. It is centered on increasing growth and stimulating job creation, strengthening external and fiscal stability, increasing transparency, and improving social spending.
  • The structural reform agenda is designed to improve the investment climate and reduce costs to businesses, which will make it easier to create jobs while also protecting Jordan’s poor and most vulnerable.
  • Financing support from Jordan’s international partners will be critical to support the government’s reform efforts.

The Jordanian authorities and a team from the International Monetary Fund
(IMF), led by Chris Jarvis, have reached a staff-level agreement on a
48-month arrangement under the Extended Fund Facility (EFF) for around $1.3
billion. This agreement is subject to IMF management approval and Executive
Board consideration, which is expected in March, following the completion
of agreed prior actions.

Following the conclusion of discussions, Mr. Jarvis made the following
statement today in Amman:

“The agreed economic program, to be supported by an arrangement under the
EFF, will reinforce the authorities’ ambitious macroeconomic and structural
reform agenda for the next four years—an agenda underpinned by their
five-year reform framework, which attracted significant support from the
international community at the London Initiative in 2019. The authorities’
program aims at enhancing the conditions for more inclusive economic
growth, particularly in light of the challenges posed by ongoing regional
conflict and uncertainty. In this regard, the hosting of Syrian refugees is
a testament to Jordan’s generosity and resilience. Donor support for this
effort and for the program continues to be essential.

“Fiscal and monetary policies under the program will continue to safeguard
macroeconomic stability; by reducing fiscal and external vulnerabilities in
an equitable, growth-friendly, and inclusive manner. A gradual and steady
fiscal consolidation and reform path will help bring down public debt over
the program period, while allowing sufficient space for social and capital
spending. Monetary policy will continue to be anchored by the exchange rate
peg, which serves the economy well. International reserves will be
maintained at comfortable levels.

“In addition to macroeconomic stability, the program is centered on a
pro-growth reform agenda—which is based on measures to improve tax
administration and reduce tax evasion, as well as more effective
public-sector investment, reduced business costs, and measures to improve
government transparency and the investment climate. Key reforms include
reduced electricity prices for businesses to improve competitiveness,
together with development of a plan to reduce production costs and direct
households’ subsidies only to those who need it. In addition, the
authorities will introduce measures to help young people and women enter
the labor force and will reform the Illicit Gains Law to improve Jordan’s
asset-declaration system for public officials. This last measure will help
improve accountability and raise public trust.

“GDP growth is projected to reach 2.1 percent in 2020 and will increase
gradually in the coming years; reaching 3.3 percent over the medium term
and reinforced by the program’s structural-reform timetable. Inflation will
remain subdued in 2020, at under 1 percent (y/y), but is expected to
converge to 2.5 percent over the next few years. External imbalances have
narrowed—building on a significant improvement last year, in which the
current account deficit fell from 7 percent of GDP to 2.9 percent, the
deficit is expected to remain moderate over the medium term.

“We would like to thank our counterparts in Jordan for an open and fruitful
dialogue. We held a wide-ranging set of meetings with the prime minister,
the minister of finance, the minister of planning and international
cooperation, the central bank governor, other senior cabinet ministers and
officials, members of parliament, donors, key business leaders, and
representatives from civil society.”

IMF Communications Department


Phone: +1 202 623-7100Email:


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