Two 'Eids' in one? IMF to dispense third tranche of its loan to Jordan
The International Monetary Fund (IMF) executive board has agreed to dispense the third tranche of its “Stand-By Arrangement” (SBA) loan for Jordan to finance projects at a total of $258 million, according to Finance Minister Umayya Toukan.
The Kingdom secured this approval after the conclusion of the second review discussions, which might be extended to early November upon an agreement, Toukan said on Saturday in Washington, DC, quoted by the Jordan News Agency, Petra.
Jordan’s 36-month SBA was approved on August 3, 2012 for about $2.06 billion to support the national programme of economic reforms aimed at maintaining macroeconomic stability and improving fiscal and external positions, while protecting the vulnerable segments of the population and fostering stronger and more inclusive growth.
In April 2013, Jordan received the second tranche of the loan to finance projects under the programme, at a total of $385 million.
The minister said the government’s performance during the first half of this year met expectations as it was supported by the stability of the Egyptian gas supply. Toukan expected the performance to remain as foreseen by the IMF programme for the rest of this year.
While expressing hope that the Central Bank of Jordan would continue to boost foreign reserves, particularly with the help of the Gulf Cooperation Council’s (GCC) $5 billion grant, Toukan noted that “losses incurred by the electricity company will be higher than expected in light of the recent cut in Egyptian gas, which increases the cost of fuel imports”.
On the other hand, he said the government would continue to control expenditure of public spending and abide by the guidelines of the financial and economic reform programmes, in addition to directing fuel and bread subsidies to the needy segments and conclude the endorsement of the draft income tax law.
He stressed the government’s commitment to implementing a medium-term strategy for energy that guarantees diversifying resources, arriving at covering the operational costs of the National Electric Power Company and exempting the poor and middle-class segments from the increase in the electricity tariffs, which will be applied, for households, at the start of 2014.
Meanwhile, Kristina Kostial, IMF head of mission for Jordan, commended the Kingdom’s commitment to the fund’s programme despite challenges imposed by regional unrest, especially the Syrian crisis.
She noted that the national economic performance was “good” during the first half of this year, witnessing a 2.8 per cent growth in the gross domestic product compared with the same period of last year.
Kostial expected the economic performance to remain “good” for the rest of this year and 2014, to achieve a growth of 3 and 3.5 per cent, respectively, particularly after the implementation of infrastructure projects funded by the GCC.