WASHINGTON: International Monetary Fund officials relaxed some fiscal and other targets for Jordan under its $2bn loan programme as the country struggles to deal with an influx of Syrian refugees and energy supply disruptions.
The IMF officials on Saturday agreed to give Jordan about $258m, its third tranche of aid under a three-year loan program started last year to help the Middle Eastern country speed up economic reforms and boost growth.
The IMF’s executive board must still sign off on the disbursal, which should happen in November.
Jordan will get each subsequent chunk of cash if the IMF decides it has sufficiently complied with the conditions of the program, which include getting the government’s finances in order and cutting subsidies for electricity and fuel. An IMF seal of approval can also help mobilise support from other donors.
The IMF had previously set a target for the government deficit and losses at the state-owned electricity firm Nepco at 7.2 percent of GDP for next year, but agreed to relax it by about one percentage point in light of Jordan’s tough external environment, Kristina Kostial, IMF mission chief for Jordan, told reporters in a briefing.
The Fund also loosened targets for how quickly Jordan would have to raise electricity tariffs, she said, praising the government’s commitment to reforms.
“Jordan has been really hit hard with exogenous shocks,” Kostial said. “When I compare April with where we stand now, it’s, I think, even gotten tougher on Jordan,” she said. The IMF last reviewed Jordan’s programme in April.
“Of course you have to acknowledge the financial realities, clearly, but we want to be as flexible as possible in accommodating these exogenous shocks,” she said.
Jordan has been hard-hit by the cost of an estimated half a million refugees fleeing the civil war in neighbouring Syria and the influx has further squeezed the economy following a financial crisis last year.
reuters
