IMF offers Jordan further support amid heightened Middle East conflicts

26 Jun 15

The International Monetary Fund has urged Jordan to step up its tax administration and public financial management reforms with the help of a $400m loan after finding that its strong performance so far could be under threat from conflict in neighbouring countries.

Concluding a three-week mission visit to Jordan on Wednesday, a country which has been affected by the crises in nearby Syria and Iraq, the IMF called for policy changes to strengthen economic growth, address unemployment and low labour participation.

Jordan’s growth projections continue to increase, the IMF noted, rising to about 3% in 2015 and 4.5% over the medium term. But uncertainties over the Syria and Iraq conflicts could adversely affect growth.

Kristina Kostial, IMF chief mission leader for Jordan, said: “The economy is expected to further strengthen over the medium term, but there are downside risks. There is a need to accelerate structural reforms to strengthen growth and address chronically high unemployment and low labour force participation.

“Of particular importance are policy changes to: help the young and unemployed to acquire skills that match the private sector’s needs; increase the participation of women in the labour force; re-examine public sector hiring and compensation; improve the business environment; and strengthen public institutions, including through better tax administration and public financial management.”

Discussions during the visit focused on sustaining the programme’s achievements. Fiscal and monetary policies are on track to meet the 2015 objectives, the fund said. The government aims to reduce debt to about 70% of gross domestic product by 2020, a level that would markedly reduce vulnerability to shocks, the IMF said.

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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