Standard & Poor’s maintains Jordan’s credit rating and outlook, citing strong fiscal and monetary policies

[14-03-2023 03:06 PM]

Ammon News - Sovereign credit rating agency Standard & Poor’s (S&P) has maintained Jordan’s credit outlook as B+/B with a stable outlook, despite global economic shocks including continued interest rate hikes and the repercussions of recent bank defaults.

With the support of the International Monetary Fund (IMF), Jordan is implementing reforms aimed at enhancing investment and competitiveness, widening the tax base, targeting corruption, and improving transparency, S&P’s report has stated.

As a result, S&P estimates that the net general government debt-to-GDP ratio has started declining, and will fall to a still sizable 73% of GDP by 2026. Public debt levels are also expected to decline from their current elevated level.

"We forecast that Jordan's fiscal imbalances will moderate in the coming years, aided by economic growth, tax reforms, and contained expenditure plans," S&P detailed.

Commenting on the recent upgrade, Minister of Finance Mohamad Al-Ississ said that the series of confirmations of Jordan’s credit rating over the past few months is “a collective validation across rating agencies in their confidence in Jordan’s monetary and fiscal policy, at a time where it is being tested in many other countries that have foregone their macrostability.”

Al-Ississ had previously noted that sovereign credit upgrades are “a testament to what happens when Jordan is given the space to reform on its own terms in a spirit of collaboration with its partners, we do reform in the right and most sustainable way.”

Al-Ississ added “our fiscal reform has shown that fair and equitable reform is not only good policy, but produces the best results as well.”

Governor of the Central Bank of Jordan (CBJ) Adel Al-Sharkas affirmed that stabilizing the credit rating and the outlook of the economy in light of an unfavorable global environment categorizes Jordan as a stable economy within an unstable era, making it an attractive destination for safe, long-term investments.

Al-Sharkas stressed that S&P’s rating also reflects the soundness of Jordan’s macroeconomic fundamentals, and the international institutions’ confidence in CBJ’s monetary and banking policies, in maintaining monetary stability, building strong and resilient banking sector, and its efficiency in risk management in line with global banking developments.

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