Jordan, IMF conclude discussions on Extended Fund Facility

[28-10-2020 04:12 PM]

Ammon News - AMMONNEWS - The Ministry of Finance Wednesday said it had concluded its discussions with the International Monetary Fund (IMF) on the first review of the $1.3 billion Extended Fund Facility (EFF) which the Kingdom obtained earlier this year.

The ministry indicated that it had reached an agreement at the level of experts with the IMF to conclude the first review, noting that the transfer of the second installment of the EFF is now subject to the approval of the IMF’s Executive Board.

The first review is a positive indication of the government's success in maintaining financial and monetary stability and proceeding with the implementation of structural economic reforms included in the program, the ministry added in a statement.

"Jordan's passing of the first review in light of the challenges we are going through now is a commendation of the health and economic measures taken by the Kingdom since the beginning of the pandemic, and evidence of our development partners' confidence in the ability of the Jordanian economy to recover", Minister of Finance Muhammad Al-Ississ said.

The minister stressed that the fight against customs and tax evasion and avoidance is continuing, saying the government will "completely shy away from imposing new taxes".

He explained that the only way out of the repercussions of the coronavirus pandemic is to prepare the economy for growth and jobs, which has become the primary challenge in light of high unemployment rates.

The first review of the EFF included issues related to the re-prioritization of structural reforms as required in the current stage. Other areas of the review included combating tax and customs avoidance, reducing business-doing costs, including labor and energy, and enhancing government transparency with regard to illicit gain and government spending efficiency.

This is in addition to progress made toward strengthening social protection networks to help groups most affected by the pandemic.

The IMF has also revised its estimates regarding public finances after taking into account developments since the beginning of the crisis and the fiscal and monetary policies adopted by the government to contain the disease and reduce its health and economic impacts.

Accordingly, the Fund lowered its Jordan's economic growth forecast for the current year from -5 percent to -3 percent, while estimating nominal growth in 2021 at 3.8 percent.

It is noteworthy that the EFF was the first program to be approved by the IMF in the wake of the COVID-19 crisis, which helped the Kingdom access global debt markets to obtain financing at competitive prices and strengthened investor and donor confidence in the resilience of the national economy.

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