São Paulo – Jordan should end 2012 with Gross Domestic Product (GDP) growth as against 2011, and with practically stable inflation. The country continued executing measures to reduce its deficit and dependence on the oil sector and on government subsidies this year. However, the evaluation of the International Monetary Fund (IMF) disclosed on Wednesday (26) warns that the country has challenges ahead, among them controlling the great flow of Syrian refugees and price hikes.
The meeting between IMF technicians and authorities of Jordan took place from December 3rd to 20th and was due to a loan programme made by the Fund so that the Arab country may reduce its deficit.
Among the problems faced this year are the greater number of Syrian refugees due to the armed conflict between the Syrian regime and opposition militants, the interruption in the supply of natural gas, the greater food and oil prices and the reduction in donations made to the country.
"Nonetheless, growth is expected to increase slightly to 3%, compared with 2.6% in 2011, while average inflation is expected to be around 5% for the year,” according to a press statement by the Fund, signed by the head of the delegation that travelled to Jordan, Kristina Kostial. The IMF forecast is that the GDP of the country should grow 3.5% in 2013 and that inflation should total 3.9%.
Among the measures adopted in 2012 and praised by the IMF are those that resulted in the reduction of financial imbalances both in domestic accounts and in foreign accounts without compromising the wellbeing of the population. This year, Jordan eliminated subsidies to the oil sector, except for those of the liquefied gas sector. According to the IMF, this measure has made the country less vulnerable to variations in the price of oil, has reduced the impact of greater prices for the population and has helped reduce spending.
The US$ 2.06 billion made to Jordan by the IMF should be paid up to 2015 and should be used to promote economic reforms without affecting fiscal performance. Also through this loan, Jordan should promote growth and social inclusion.
*Translated by Mark Ament
