The Washington-based IMF has approved the disbursement of $396.3m to Jordan.

The fund approval followed a favourable outcome of the seventh and final review of the country’s economic programme, supported by a $2bn standby agreement (SBA) signed in August 2012.

Jordan’s SBA has been built around the need to support its economy amid an extremely difficult environment resulting from the conflicts in Iraq and Syria.

Mitsuhiro Furusawa, deputy managing director and acting chairman at the IMF, said Jordan’s public debt should start stabilising this year as a result of “gradual fiscal consolidation, aided by lower oil prices”. Furusawa also cited that Amman’s prudent monetary policy has preserved macroeconomic stability within the country.

“Although growth has slowed down in the first quarter of this year, the current account deficit is narrowing, foreign reserves remain at an adequate level, and inflation is low,” Furusawa added in a press statement.

As well as fiscal reforms, the executive also underscored the progress being made by Jordan in terms of private sector development.

The IMF, however, is not oblivious of major challenges ahead. Jordan has to exert greater efforts to cut down its public debt, with national debt accounting for nearly 90 per cent of its nominal GDP. The fund has said Jordan’s fuel, energy and water subsidy reforms are seen to play a crucial role towards putting the public debt firmly on a downward path.

Other areas of improvement that could be aided by policy and structural reforms include job creation, the business environment and the overall quality of public institutions.