Finance minister, CBJ governor highlight Jordan’s economic resilience amid global crises

AMMAN — Despite the global economic crisis, the Jordanian economy has managed to overcome it, showcasing its resilience and strength, and the success of international monetary administrations, Finance Minister Mohamad Al-Ississ said on Friday.

Speaking at a session on fiscal and monetary policy at the “A Year of Modernisation” forum, Al-Ississ reviewed how Jordan managed to maintain its “financial risk coefficient” amid the global crisis, even though this indicator has surged in neighbouring Arab countries, the Jordan News Agency, Petra, reported. 

The minister stressed that Jordan’s success in preserving its financial stability protects the middle class from unpredictable market fluctuations, noting that Jordan is the only oil-importing Middle Eastern country that has managed to preserve its credit rating.

He added that Jordan’s commitment to reforms was evident from the positive outcomes of the International Monetary Fund’s evaluations, which not only facilitated financing avenues for the Jordanian government, but also saw a positive response from global investors.

Al-Ississ spoke about the government’s stringent measures against tax evasion and its decision to alleviate sales tax on several essential goods, intended to improve the financial well-being of Jordanian citizens.

During the same session, Governor of the Central Bank of Jordan (CBJ)  Adel Sharkas highlighted that “dollarisation” in Jordan hit an all-time low at 18.3 per cent during the first half of 2023, which reflects increased confidence in the Jordanian dinar and the national economy.

Referring to the unprecedented global inflationary pressures, Sharkas said that the issues required timely and informed decision-making, highlighting the CBJ’s approach in curbing inflation and citing the 2020 inflation rate of 4.2 per cent as “a testament to the government’s proactive measures”.

The CBJ’s primary focus remains on ensuring monetary stability, the governor added, deeming it a cornerstone for a long-term macroeconomic stability. He also mentioned that Jordanian dinar must be supported with a safe reserve of foreign currencies, which currently stands at $17.4 billion.

Jordan’s banking system is stable, strong and able to withstand economic shocks as confirmed by international institutions and  financial indicators of the Jordanian banking system, he added.

The deficit rate in credit facilities has reached a regional historical low of 4.5 per cent, Sharkas said, attributing the score to the Central Bank’s compliance with international accounting standards and best practices.

Also on Saturday, Sharkas participated in a panel discussion held on the sidelines of the forum. During the panel, Sharkas said that the last decade of digital and technological solutions developments, including mobile applications for banks and e-payment platforms, has boosted the efficiency and reduced the costs of financial transactions.

Jordan was among the first countries that developed a national “strong and safe” payment system, Sharkas said, stressing that all systems that rely on smartphone applications are managed via the system, which held around 2 million e-portfolios as of the end of 2022.

The first national system for reviewing and paying bills electronically, eFAWATEER.com, witnessed JD10.5 billion in transactions for public and private sector institutions in 2022, he added. The service was launched in 2015. 

Jordan’s latest instant payment and money transfer system, CliQ was launched in 2020. As of the end of 2022, CliQ had 2.61 million users who made transactions worth JD7.2 billion through the service last year.