IMF prepares new Jordan fund

21 June 2016

Extended Fund Facility covers a 36-month period

The Washington-based International Monetary Fund (IMF) will finalise a new fund programme for Jordan in July, following a staff–level agreement on a request for a 36-month Extended Fund Facility (EFF).

Once approved, the EFF will “facilitate loans and grants from multilateral and bilateral sources during the 36-month period, as agreed in the London Conference of February 2016,” the IMF said in a statement

Donors are understood to have pledged significant financial support during the conference to address the impact of Syrian refugees, which now account for close to 14 per cent of its total population of 9.5 million, on the kingdom’s economy.

The EFF supports Jordan’s ambitious macroeconomic and structural reform agenda under the country’s first 10-year economic framework called Vision 2025. ”The economic program aims at enhancing the conditions for more inclusive economic growth, particularly in light of the challenges posed by the regional conflicts on exports, investment, and the labour market,” the statement said.

The reforms are expected to focus specifically on the business environment, the energy and water sectors, the financial sector, and the labour market and on protecting the most vulnerable segments of the population.

Jordan’s economy has been experiencing extreme pressure from providing for the needs of an estimated 1.3 million Syrians that have fled to the country since the Syrian civil war began in 2011.

Jordan’s Minister of Planning and International Cooperation Imad Fakhoury told the IMF spring meetings that Jordan is ”fiscally bleeding” amid a growing debt, leaving the country very little space to invest in its own development priorities. Hosting the refugees reportedly costs the Jordanian economy $2bn annually.

The new fund builds on the $2bn, three-year Stand-by Agreement extended to Jordan, whose final instalment of $400m was released in August 2015.

 

 

 

 

 

 

 

 

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