IMF welcomes progress in Jordan economy

The International Monetary Fund welcomed Jordanian authorities' "commitment to, and progress in, implementing their economic program" despite increasingly difficult regional environment, including spillovers from tragic situations in Syria and Iraq.
"Building on strong performance this year, we reached a staff-level agreement on the fifth review under the SBA (Stand-By Arrangement) and on reducing the number of remaining reviews under the program; the outstanding disbursements will be distributed equally across those reviews," Kristina Kostial, IMF mission chief for Jordan, said in a statement issued by the Fund Sunday.
The agreement is subject to approval of the IMF Executive Board, which is scheduled to consider the review next month. Board approval would make available to Jordan about USD 129 million.
"Jordan's economy performed well during 2014," Kostial said.
Helped by a recovery in mining and better activity in the tourism and utilities sectors, growth stood at three percent year-on-year in the first half of the year, she noted.
With a further slowdown in food prices, headline inflation dropped to 2.7 percent year-on-year in September, she said. The current account deficit continues to narrow significantly, the banking sector remains robust, and financial markets are stable, she said.
"The economy is expected to gradually strengthen," Kostial said.
Growth is projected to increase to 3.3 percent in 2014, and to 4.5 percent in the medium term, she said, while inflation is expected to decline to 2.9 percent at the end of 2014, and two percent in the medium term.
"The current account deficit (including grants) would continue to substantially improve to less than four percent of GDP (Gross Domestic Product) in the outer years of the medium term, mostly reflecting a lower energy-import bill," she said. "Risks to this outlook remain high, mostly related to the Syria and Iraq conflicts."