Fitch upgrades Jordan’s credit outlook to stable

AMMAN — International credit rating agency Fitch Ratings on Wednesday upgraded Jordan’s credit outlook to stable, citing fiscal discipline and post-pandemic economic recovery.

Fitch expects that continued fiscal and economic reforms will ultimately result in stabilisation and then reduction of government debt/GDP, according to a statement from the Finance Ministry. 

The decision, coming after consultation with authorities including Finance Minister Mohamad Al-Ississ and agencies, also includes affirming Jordan’s long-term credit rating at BB-. 

In their credit report, Fitch anticipates a narrowing of Jordan’s fiscal deficit in light of higher revenue, driven by a cyclical rebound as well continued efforts to combat tax evasion and streamline the tax system.  General government debt is expected to peak at 94 per cent of GDP 2022-2023. 

Fitch expects GDP to recover by 2 per cent in 2021 and 2.5 per cent in 2022, buoyed by a recovery of global trade and some pick-up in tourism. 

However, in the near term, further variants of the coronavirus in Jordan and elsewhere pose risks to growth, and coronavirus cases in Jordan have been rising; despite this, at a  40 per cent vaccination rate, Jordan’s relatively young population and well-equipped health system mitigate this risk, the statement said. 

The credit issuance follows ongoing with reforms with the World Bank and a recent staff-level agreement between authorities and the IMF on the third review of its Extended Fund Facility arrangement in November 2021, which Fitch’s report notes reflects “strong performance relative to qualitative structural benchmarks on a broad range of reforms and the fulfilment of quantitative performance criteria”.