Raad Mahmoud Al-Tal

The staff-level agreement reached between Jordan and the International Monetary Fund (IMF) on the sixth review of the Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF) represents an important milestone in Jordan’s economic reform process. The significance of this review lies not only in the additional financing of approximately $294 million, comprising $133 million under the EFF and $161 million under the RSF, but also in the continued commitment to implementing agreed reforms despite regional challenges and economic pressures.

The importance of the review is reflected in the IMF’s confirmation that Jordan has met all quantitative performance criteria and completed most of the structural benchmarks due under the programme. This demonstrates progress in programme implementation, but raises a deeper economic question: To what extent have these commitments and policy measures translated into tangible and sustainable improvements in economic performance?

On the fiscal front, the government managed to achieve its primary fiscal deficit target in 2026, despite a decline in tax revenues equivalent to approximately 0.8% of GDP during the first half of the year as a result of regional developments. Spending restraint, together with improved revenue collection during the third quarter, helped contain this shortfall. This experience highlights the importance of sound fiscal management in absorbing external shocks. However, it also underscores the need to broaden the tax base and improve collection efficiency rather than relying increasingly on expenditure restraint.

The 2027 budget targets a primary deficit of 0.9% of GDP for the central government, excluding grants, alongside efforts to reduce public debt to approximately 80% of GDP by 2028. While these targets are important for strengthening fiscal sustainability, achieving them requires a balanced approach to public expenditure, ensuring that fiscal consolidation does not come at the expense of capital investment, development projects and productive social spending.

The third review under the Resilience and Sustainability Facility carries particular importance because it addresses structural vulnerabilities and long-term risks. The associated reforms include establishing a central register of infrastructure assets owned by government companies in the construction and energy sectors, strengthening health preparedness, and defining financing mechanisms for health emergencies. These measures are economically significant because they help improve public asset management, reduce vulnerabilities and limit potential future fiscal liabilities.

Economic indicators reflect Jordan’s ability to maintain macroeconomic stability amid a turbulent regional environment. The economy recorded real growth of approximately 3% during the first half of 2026, while foreign reserves reached $27.5 billion, covering around 8.8 months of imports. Inflation remained stable at 2.26%. These indicators demonstrate the resilience of monetary and external stability, while economic growth projections for 2026 range between 2.8% and 3%.

However, maintaining stability does not necessarily mean that structural and productive challenges have been resolved. Current growth rates make it essential to focus on the sources of growth and their capacity to generate employment, increase productivity and raise domestic value added. This highlights the importance of strategic projects, such as the Aqaba-Amman water desalination and conveyance project and railway development projects, as investments capable of strengthening productive linkages, reducing transportation costs and creating new opportunities for investment.

The sixth review is therefore more than another financing milestone. It provides an opportunity to assess the progress of Jordan’s economic reform programme. Although progress has been achieved in strengthening macroeconomic indicators and meeting performance criteria, the next phase requires deeper structural reforms, a more competitive business environment, stronger private investment and greater public-sector efficiency.

The success of the programme should not be measured solely by the completion of reviews or the availability of financing. Rather, it should be measured by its ability to transform fiscal and monetary stability into more productive economic growth, sustainable employment opportunities and tangible improvements in living standards.