World News

IMF staff agrees new $1.3 billion four-year loan program with Jordan

WASHINGTON (Reuters) – The International Monetary Fund on Thursday said it has reached a staff-level agreement with Jordan on a $1.3 billion new four-year program aimed at bolstering economic growth and stimulating job creation, while strengthening fiscal stability.

The program, arranged under the IMF’s Extended Fund Facility (EFF), is subject to IMF management approval and consideration by the IMF Executive Board, which is expected in March, the IMF said in a statement.

It said Jordan’s structural reform agenda was “designed to improve the investment climate and reduce costs to businesses, which will make it easier to create jobs while also protecting Jordan’s poor and most vulnerable.”

News of the agreement was first reported by Jordan’s state news agency Petra earlier Thursday.

It said Jordan will receive nine installments of between $140 million and $150 million over four years under the new program, with a first installment of $140 million expected by the end of March.

IMF official Chris Jarvis, who led the IMF team negotiated the agreement with the Jordanian officials in Amman, said the new program would reinforce Jordan’s ambitious macroeconomic and structural reform agenda for the next four years.

“The authorities’ program aims at enhancing the conditions for more inclusive economic growth, particularly in light of the challenges posed by ongoing regional conflict and uncertainty,” Jarvis said, singling out Jordan’s role in the Syrian refugee crisis.

“In this regard, the hosting of Syrian refugees is a testament to Jordan’s generosity and resilience. Donor support for this effort and for the program continues to be essential,” Jarvis said.

He said the program would include efforts to reduce electricity prices for businesses to improve competitiveness, and provide direct households subsidies to those in need.

Jordan would also introduce measures to help young people and women enter the labor force and reform an illicit gains law to improve Jordan’s asset-declaration system for public officials, improving accountability.

It said Jordan’s gross domestic product was projected to reach 2.1% in 2020, reaching 3.3% over the medium term, the IMF said. Inflation was expected to remain subdued in 2020, at under 1% but could edge higher to 2.5% over the next few years.

(Reporting by Andrea Shalal and David Lawder; Editing by David Gregorio)