Continued post-COVID recovery and positive spillovers from the region led to stronger growth in 2022-23, however, the medium-term outlook is weighed down by elevated commodity prices, tightening financial conditions, and a slowing global economy.
GDP growth, according to the IMF, is projected to remain at around 2.7 percent in 2022-23, up from 2.4 percent in the fourth review. Inflation, projected at 4.4 percent for 2022, has increased but remains moderate and should ease in the period ahead. The banking system remains resilient to shocks.
Financial challenges in the electricity sector are exacerbating fiscal pressures as subsidies have increased considerably on the back of high international commodity prices.
Unemployment for Jordanians remained elevated at 22.6 percent in 2022, with youth unemployment showing some decline but remaining high at nearly 50 percent, and the IMF’s financial support will help Jordan navigate these challenges and catalyze support from other development partners, which will be critical to enable Jordan to promote an inclusive recovery and build forward better, while continuing to host 1.3 million refugees.
Following the Executive Board discussion, Deputy Managing Director and Acting Chair, Kenji Okamura, said: “Fiscal performance has been strong, on the back of sustained legislative and administrative reforms to reduce tax evasion and avoidance.”
“The authorities have also replaced untargeted and fiscally unaffordable fuel subsidies with cash transfers to protect the most vulnerable segments,” Okamura added.
Source: Jordan News Agency