IMF grants $30 million to Jordan in first review

The International Monetary Fund (IMF) completed on Friday (July 11) the first review of Jordan’s performance under a two-year US$119 million aid package and released a $30 million payment to the country.

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By  Massoud Derhally Published  July 13, 2003

The International Monetary Fund (IMF) completed on Friday (July 11) the first review of Jordan’s performance under a two-year US$119 million aid package and released a $30 million payment to the country.

The authorities, however, have indicated that they do not intend to draw on the financing made available by the completion of this review, given the strength of their external position.

In approving the disbursement, the Executive Board also granted a waiver of Jordan’s non-observance of the structural performance criterion regarding the pension reform strategy and disability pensions.

Anne Krueger, first deputy managing director of the IMF said skill full economic management and international donor support helped mitigate the impact of the war in Iraq in early 2003.

“The Jordanian economy performed strongly through 2002, despite the difficult regional environment, and the authorities should be commended for their commitment to sound macroeconomic policies and far-reaching structural reforms,” said Krueger.

“The external sector has shown noteworthy strength, reflecting the authorities’ steadfast approach to structural reforms, including trade liberalization. Going forward, continued export-led growth will be key to help raise living standards and employment, and alleviate poverty,” added Krueger.

Krueger added that further fiscal consolidation remains the cornerstone of Jordan’s macroeconomic policies, commending the authorities on adopting a ambitious fiscal deficit target for 2003, supported by a package of fiscal measures implemented in May.

Jordan’s comprehensive pension reform strategy would also enhance fiscal sustainability over the medium and long term, Krueger pointed out.

But Krueger also said the loss of subsidized oil from Iraq is likely to complicate fiscal management. “The recent increase in domestic petroleum product prices is a good first step toward mitigating the fiscal impact of this loss. The authorities also aim to eliminate the gap between domestic and international prices for the remaining subsidized petroleum products over the medium term,” she said.

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