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Ammon News - Fitch Ratings expects the Central Bank of Jordan (CBJ) to cut interest rates by an additional 75 basis points before the end of the current year 2024.

In a report, Fitch indicated that the CBJ may move to reduce the benchmark interest rate by 75 basis points in the fourth quarter of 2024, to reach (6.25%), and 125 basis points (to 5.00%) by the end of next year 2025, in line with expected decisions by the US Federal Reserve.

Reducing interest rates in Jordan will stimulate the allocation of credit to the private sector, which slowed sharply as real interest rates rose during the period 2022-2023, according to the report.

The reduction in interest rates is also expected to boost household spending, according to Fitch, as private consumption is expected to add 2.2 basis points to overall growth in 2025, the largest contribution since 2021.

Fixed investment will rebound in 2025, the report showed, as monetary easing improves companies’ credit tolerance, while an expected decline in regional tensions from the second half of 2025 onwards will encourage capital spending that has been postponed since Q4 2023.