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International Monetary Fund. Middle East and Central Asia Dept.

IMF Country Report No. 24/345

International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses IMF’s 2024 Article IV Consultation, Second Review under the Extended Arrangement under the Extended Fund Facility, and Request for Modification of Performance Criteria for Jordan. Jordan continues to show resilience and maintain macro-economic stability, despite the headwinds caused by the regional conflict. This resilience reflects the authorities’ continued implementation of sound macro-economic policies and reform progress. Inflation is projected to remain low, at about 2 percent, reflecting the Central Bank of Jordan’s firm commitment to monetary stability and the exchange rate peg. Jordan’s external position remains relatively strong. Bringing the Jordanian economy onto a higher growth trajectory is essential to create more jobs and raise prosperity. This requires accelerating structural reforms, while maintaining macro-economic stability. Strong and timely international support also remains crucial to help Jordan navigate through the external headwinds, while shouldering the costs of hosting a large number of Syrian refugees.
International Monetary Fund. Middle East and Central Asia Dept.

1. Jordan continues to show resilience and maintain macro-economic stability, despite the headwinds caused by the ongoing and intensifying conflict in the region. The conflict in Gaza and Israel that started in October 2023 and broadened to Lebanon in September this year is raising further the already heightened regional tensions and uncertainty. Together with the disruptions to trade routes, it is creating substantial headwinds for Jordan’s economy.

International Monetary Fund. Middle East and Central Asia Dept.

1. Our Jordanian authorities are thankful to the Fund’s Executive Board and management for their continued support, and to staff for the productive discussions held in the context of the 2024 Article IV Consultation and the Second Review under the Extended Fund Facility (EFF).

International Monetary Fund. Middle East and Central Asia Dept.
International Monetary Fund. Middle East and Central Asia Dept.
This paper highlights Jordan’s First Review under the Extended Arrangement under the Extended Fund Facility and Request for Modification of Performance Criteria. Jordan’s economy continues to show resilience despite a challenging external environment. The economy continues to grow, albeit at a somewhat slower pace, inflation is low, and reserve buffers are strong. Growth is projected to pick up pace in 2025, contingent upon the Israel-Gaza conflict ending and its impact fading. Uncertainty is high, however, and structural challenges remain, with continued high unemployment. Strong progress was also made in implementing structural benchmarks (SBs), with all six SBs for the first review met, and with good progress being made toward meeting SBs for the next review. The authorities remain firmly committed to sound macro-economic policies and advancing structural reforms, to maintain macro stability, further strengthen economic resilience in the face of successive external shocks, and foster stronger, job-rich growth. Steadfast implementation of structural reforms is crucial to create a more dynamic private sector that can generate sufficient jobs and contribute to higher living standards.
International Monetary Fund. Middle East and Central Asia Dept.

Jordan’s economy continues to show resilience despite a challenging external environment. The economy continues to grow, albeit at a somewhat slower pace, inflation is low, and reserve buffers are strong. Growth is projected to pick up pace in 2025, contingent upon the Israel-Gaza conflict ending and its impact fading. Uncertainty is high, however, and structural challenges remain, with continued high unemployment.

Suphachol Suphachalasai
,
Hasan Dudu
,
Diala Al Masri
,
Fabiana Machado
,
Junko Mochizuki
, and
Karlygash Zhunussova
Suphachol Suphachalasai
,
Hasan Dudu
,
Diala Al Masri
,
Fabiana Machado
,
Junko Mochizuki
, and
Karlygash Zhunussova
This technical assistance conducts a climate policy diagnostic for Jordan, covering climate adaptation and mitigation policy, as well as enabling institutions. Jordan faces acute challenges of climate-food-water nexus—innovative climate policy approaches are key, given limited fiscal space. While Jordan needs to strengthen the investment climate for climate investment through streamlining existing policies and alleviating critical barriers, making social policy more shock-responsive and strengthening risk management can go a long way in building resilience. As climate-related risks globally intensify, the government is encouraged to move toward a risk-informed policy and financing strategy.