Jordan will push ahead with IMF fiscal reforms, government says

Jordan will push ahead with IMF fiscal reforms, government says
Despite changes to the government and popular protests, Jordan will push ahead with IMF reforms, a leading minister has said.
2 min read
03 July, 2018
Jordan has seen huge protests against reforms [Getty]

Jordan will push ahead with unpopular fiscal reforms and an IMF loan, the government said on Tuesday, just weeks after a cabinet reshuffle was ordered when large-scale anti-austerity protests rocked the country.

Deputy Prime Minister and Minister of State Rajai Muasher said that Jordan's financial difficulties meant that the kingdom will have to accept $700 million Extended Fund Facility from the IMF.

Jordan will also have to pursue painful economic reforms in-line with an IMF-backed bailout plan to fix the finances of the heavily indebted kingdom.

"We cannot go back on fiscal reforms. We are committed to the fiscal reforms," said Muasher.

"Economic growth is weak, public debt is up and we have a budget deficit," Jordan Times reported the minister saying.

"The national programme that we will discuss with the IMF will take our needs, priorities and conditions into account," he told journalists in a media meeting.

Finance Minister Ezzeddine Kanakrieh said that Jordan's economic growth figures were "less than forecast", saying revenues were $564 million less than the budget projected.

"To address the current challenges, the key is to achieve fiscal and monetary stability," he said.

"We have a strategy to reduce the overall public debt, but there are still challenge."

Jordan saw large anti-austerity protests last month, when the government revealed plans for painful reforms that included tax and fuel hikes.

The rare protests led to the downfall of the government with the prime minister and key ministers replaced by King Abdullah II.

Some of the planned tax reforms were frozen or cancelled, although some economists have suggested that painful reforms can't be put on hold forever.

Muasher said that revenues from sales taxes were four times that of income taxes, suggesting that citizens could see further levies.

He added that there needs to be "consensus" on how the government finds essential funds for services and balance the budget.

"We need to study the tax burden and make sure it is fair, and at the same time we need to improve services in various areas," he added.

Jordan has benefited from promises of aid and loans from friends, such as Gulf states and Germany.