Jordan’s economy is likely to miss the 2.9 per cent growth forecast set in October, and is expected to to achieve a more modest 2.5 per cent growth for the year, according to the IMF mission cheif to Jordan, Kristina Kostial, following the conclusion of the latest IMF visit to the country.

The Washington-based IMF may downgrade its forecast for Jordan’s economic growth for a fourth time this year, which started with a 3.8 per cent forecast in May, to 3 per cent in August, and 2.9 per cent in October.

The main factor that triggered the latest downgrade is the country’s first-half performance where the economy only expanded by 2.5 per cent, which was due to a slowdown in key sectors such as exports and agriculture, as well as the worsening regional instability.

Local media quoted IMF mission chief to Jordan, Kristina Kostial, saying that the 2.9 per cent growth rate “looks hard to achieve in light of the slowdown in key sectors… and regional shocks from instability in neighbouring countries.”

In August, the IMF released the final disbursement of nearly $400m of the $2bn standby agreement (SBA) with Jordan, which was signed in 2012. The SBA has been built around the need to support Jordan’s economy in dealing with the aftermath of the conflicts in Iraq and Syria.

Nearly half of Jordan’s 6.7 million population originates from the West Bank and Gaza in the Palestinian Authority, Syria and Iraq. Hosting the refugees has caused a major burden to the kingdom’s struggling economy. This is further exacerbated by the slow disbursement of pledges from international donors who have pledged commitment to help implement programmes to address the needs of the Syrian refugees.

Kostial had indicated that the IMF and Jordan would start a new round of discussions this February over a new assistance programme to assist the kingdom in implementing medium-term structural reforms. The Extended Fund Facility (EEF), Kostial said, would focus on job creation and in enhancing the overall business environment to attract foreign investors.