IMF board okays new Jordan programme

AMMAN – Finance Minister Omar Malhas on Wednesday said that the executive board of the International Monetary Fund (IMF) has approved Jordan's request for a 36-month Extended Fund Facility (EFF) to carry a package of economic correction. 

Malhas told the Jordan News Agency, Petra, that the IMF has informed the government of its approval of the EFF that would enable the Kingdom to implement a series of economic reforms, adding the fund is set to issue an official statement in this regard soon. 

Petra said the IMF-sponsored programme would enable Jordan access to around $720 million in credit. 

On June 20, the government and a team of the IMF, led by Martin Cerisola, reached a staff–level agreement on a request for the EFF. 

The IMF said in a statement issued last month that executive board approval of the EFF is expected to catalyse loans and grants from multilateral and bilateral sources during the programme period of three years, in support of the Jordan Compact. 

The compact was agreed on in the London donor conference on February 2016, where countries pledged considerable financial support for Jordan to address the impact of Syrian refugees. Jordan completed a three-year Stand-By Arrangement in the amount of about $2 billion in August 2015. 

The government’s economic reform programme aims at preserving macroeconomic stability, by keeping international reserves at adequate levels, while also putting public debt on a downward path. 

To do so, the government is committed to implementing fiscal consolidation in a gradual and steady pace so that public debt is reduced from about 94 per cent of GDP to about 77 per cent of GDP by 2021, to minimise the impact on growth, according to the IMF. 

The programme will also address structural fiscal challenges, through broadening the tax base, maintaining a prudent growth of spending, enhancing tax administration, and addressing tax incentives and income taxation.