São Paulo – The International Monetary Fund (IMF) announced on Thursday (11) the disbursement of US$ 384.5 million to Jordan. The funds are part of a total loan of US$ 2.06 billion, of which the Arab country had already received US$ 384.5 million.<\/p>\n
According to a press statement disclosed by the institution, apart from liberation of another tranche of the loan, agreed on in August 2012, IMF authorities also decided to accept a request by the Jordanian government for the remains of the loan to be disbursed in one US$ 256.3 million instalment and eight US$ 128.2 million instalments over the 36-month period of the agreement.<\/p>\n
The loan to Jordan was approved by the IMF to support the national economic reform programme, aimed at maintaining macro-economic stability and improving the external and physical situation, while the country protects the vulnerable sectors of the population and promotes stronger and more inclusive growth.<\/p>\n
“The authorities have managed a difficult environment by taking appropriate policy actions under their Fund-supported economic program. Their efforts have mitigated the adverse impact of regional political instability, higher energy import prices, and a large influx of refugees from Syria,” pointed out Nemat Shafik, deputy managing director and acting chair at the IMF, in a press statement disclosed by the fund.<\/p>\n
Shafik also praised the elimination of fuel subsidies by Jordan last year, with transfer of capital to compensate the income of low- and medium-income groups. “This, together with other revenue and expenditure measures, has paved the way for higher capital spending in the current budget. Looking ahead, it remains important to further improve tax administration and the public financial management,” pointed out the executive.<\/p>\n
In the press statement, the deputy managing director of the IMF criticised the non-compliancy with some of the targets established by Jordan. “The central government and the national electricity company performed broadly in line with the program, although the end-2012 quantitative performance criterion on the central government deficit was narrowly missed and the electricity company did not repay arrears as planned. The end-2012 performance criterion on net international reserves was missed as well, but the authorities took corrective actions and reserves have since recovered,” she said.<\/p>\n
To Shafik, Jordan needs to implement a medium-term strategy for the electric sector, including energy tariff restructuring. “Direct transfers from the central government to cover the losses of the company are appropriate, as they improve transparency and allow the repayment of the company’s arrears.”<\/p>\n
According to Shafik, the Jordanian Central Bank dealt well with pressures on reserves, increasing interest rates and maintaining the attractiveness of assets in dinars. “Its focus on further building foreign exchange reserves and containing inflation remains warranted,” she said.<\/p>\n
“The planned increase in public investment will support growth. Additional reforms to boost competitiveness and reduce unemployment remain nonetheless essential. Recent measures to improve access to finance for small and medium enterprises, strengthen banking supervision, develop capital markets, and promote youth employment are welcome steps in the right direction,” she finished off.<\/p>\n
*Translated by Mark Ament<\/strong><\/p>\n