The International Monetary Fund (IMF) on Monday announced it has reached a staff-level agreement with Jordan to conclude the first review under the Stand-By Arrangement (SBA), which could make a total of $385 million available to the Kingdom in April.
In a statement e-mailed to The Jordan Times, Kristina Kostial, IMF mission chief for Jordan, said that the staff-level agreement has yet to be approved by the fund’s executive board.
The conclusion of the review by the executive board would make $385 million available to Jordan, Kostial said, adding that the board could consider Jordan’s request for the completion of the first review under the SBA as early as April.
Praising the government’s commitment to implementing its national economic programme despite an adverse external environment, Kostial indicated that authorities will continue their reform programme in order to keep fiscal and external balances on a sustainable path.
Consolidation will continue to be gradual so as not to jeopardise growth prospects and social stability, Kostial said in the statement, noting that the envisioned measures the government has to implement include an increase in government investment, improvements in tax administration and public financial management.
“Authorities have drafted a medium-term energy strategy to return the electricity company to cost recovery, on which they intend to consult with Parliament. Another important element of the programme is structural reform to reduce unemployment and increase growth,” she elaborated.
On projections for 2013, the IMF described the outlook for Jordan’s economy as good, with real growth expected to accelerate to above 3 per cent reflecting an increase in government capital spending, higher domestic consumption and a recovery in exports.
Inflation is expected to decline to about 3.2 per cent at the end of the year, while the external current account is projected to improve significantly, mainly because of higher grant financing and cheaper energy imports. This includes a doubling of gas flow from Egypt, the IMF official explained, indicating that stronger capital account will allow the Central Bank of Jordan to further strengthen its foreign reserves position.
An IMF mission visited Amman between February 20 and March 6 for discussions on the first review of the economic programme supported by the 36-month SBA, in the amount of about $2 billion, which is 800 per cent of Jordan’s quota at the IMF.
The SBA was approved by the IMF’s executive board on August 3, 2012.
Jordan received the first payment, of equal amount, of the loan in August last year.
