IMF approves $1.3 billion loan for Jordan

IMF approves $1.3 billion loan for Jordan
The International Monetary Fund approved a four-year $1.3 billion loan program for Jordan, adjusted to support coronavirus-related expenses.
2 min read
26 March, 2020
The IMF's approval would immediately make about $139.2 million available for disbursement to Jordan [AFP]
The International Monetary Fund (IMF) approved a four-year $1.3 billion loan program for Jordan, Reuters reported on Wednesday.

The program was anchored by Jordan's commitments to make structural reforms designed to lower electricity costs for businesses and create incentives for them to hire more young people, the IMF said.

"The aim is to support stronger and more inclusive growth, create jobs, especially for women and young people, and reduce poverty," the IMF said in a statement.

Though the program was designed before the coronavirus outbreak, the IMF said changes were made to support unbudgeted emergency spending covering expenditures aimed at COVID-19 response.

"If the impact of the outbreak is deep enough to put at risk program objectives, the program will be adapted further to the changed circumstances, upon reaching understandings with the authorities," the IMF said.

The IMF said the approval would immediately make available about $139.2 million for disbursement, with the remaining amounts spread over the duration of the program, subject to eight reviews, Reuters reported.

Jordanian Finance Minister Mohammad Al Ississ told Reuters that the loan has been approved. He said that the loan and ensuing reforms will help Jordan attract more donor and investment funds.

"It signals confidence in Jordan’s economic reform process, and support for our efforts to mitigate the impact of the virus on vulnerable economic sectors and individuals," Al Ississ said.

The coronavirus outbreak worries officials, as Jordan's thriving tourist sector - which generates around $5 billion annually - was hit by the pandemic.

Jordan's monetary and fiscal authorities have taken a number of measures, from injecting over $700 million in liquidity to reducing interest rates and delaying bank loan installments and customs and tax payments to help soften the coronavirus' blow.

The IMF’s approval of Jordan’s program serves as a testimony to the country's macroeconomic stability where regional conflict in recent years has weighed on investor sentiment, Al Ississ told Reuters.

In 2019, Jordan's public debt rose by almost a third in a decade to $42.4 billion, equivalent to 97% of GDP.

Agencies contributed to this report.

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