Jordan's economic journey is a fascinating story of resilience and reform. Amidst global uncertainties and regional tensions, this Middle Eastern nation has demonstrated an unwavering commitment to macroeconomic stability. The International Monetary Fund (IMF) has been a key partner in this endeavor, providing financial support and guidance through two critical facilities: the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
A Tale of Two Facilities: IMF's Support for Jordan's Economy
The IMF's Executive Board recently completed its fourth review of Jordan's four-year EFF arrangement, a significant milestone in the country's economic journey. This arrangement, approved in January 2024, provides Jordan with access to SDR 926.37 million (approximately US$1.3 billion), equivalent to an impressive 270% of Jordan's quota in the IMF. The decision allows for an immediate purchase of SDR 97.784 million (about US$130 million), bringing the total EFF arrangement purchases to SDR 535.238 million (approximately US$733 million).
But here's where it gets controversial: the IMF also approved the Resilience and Sustainability Facility (RSF) for Jordan on June 25, 2025. This facility provides access to SDR 514.65 million (around US$700 million, equivalent to 150% of Jordan's quota). The Board's decision allows for the disbursement of SDR 79.182 million (approximately US$110 million) under the RSF. Some critics argue that this dual approach may lead to overlapping efforts and potential inefficiencies, while others see it as a comprehensive strategy to address Jordan's unique economic challenges.
And this is the part most people miss: Jordan's economy is not just about numbers and facilities. It's a story of a nation's resilience and its people's determination. Despite external headwinds, Jordan's economy remains robust. Growth accelerated to 2.7% in the first half of 2025 and is projected to reach 3% in the coming years. This growth is fueled by major investment projects, deeper regional integration, and the sustained implementation of structural reforms. Inflation remains low at around 2%, and the current account deficit is expected to narrow to below 5% of GDP over the medium term. The banking sector is stable, and international reserves are strong, providing a buffer against external shocks.
Fiscal performance is also on track, with robust revenue collection and disciplined current spending. The authorities are committed to reducing public debt to 80% of GDP by 2028 through gradual fiscal consolidation and actions to lower public utility losses, while protecting social and development spending. This delicate balance is a testament to Jordan's prudent economic management.
The authorities are not resting on their laurels. They are determined to accelerate the pace of structural reforms to drive stronger growth and create more jobs. Reforms are focused on boosting investment, fostering competition, improving labor market flexibility to address youth unemployment and low female labor force participation, and strengthening the social safety net. The digitalization of government services is also a key component of this reform agenda, aiming to enhance efficiency and accessibility.
Progress under the RSF is notable, with measures addressing vulnerabilities in the water and electricity sectors and enhancing health emergency preparedness. The two RSF Reform Measures scheduled for this review have been successfully completed. This demonstrates Jordan's commitment to addressing long-term economic vulnerabilities and strengthening its balance of payments stability.
Following the Executive Board discussion, Kenji Okamura, Deputy Managing Director and Chair, praised Jordan's achievements. He highlighted the importance of the authorities' commitment to sound fiscal and monetary policies, especially in the face of regional tensions and global uncertainty. Okamura emphasized the need for gradual and growth-friendly fiscal consolidation, supported by the authorities' Medium-Term Revenue Strategy and enhanced spending efficiency. He also stressed the importance of maintaining the long-term financial sustainability of the pension system and improving the efficiency and financial viability of public utilities.
In the realm of monetary policy, Okamura commended Jordan's focus on safeguarding monetary and financial stability and supporting the exchange rate peg, which has served the country well. He also praised the ongoing efforts to strengthen the effectiveness of the AML/CFT framework, a critical aspect of financial sector oversight.
But perhaps the most critical aspect of Jordan's economic journey is the role of structural reforms. Okamura emphasized the need for accelerated structural reforms to create a dynamic and resilient private sector and foster job-rich growth. The authorities' focus on improving the business environment, promoting competition, enhancing labor market flexibility, and attracting private investment is seen as crucial to Jordan's long-term economic prosperity.
Strong and timely donor support remains essential for Jordan to navigate the challenging external environment and meet its development objectives, especially given the cost of hosting a large number of refugees. The solid progress of implementing reform measures under the RSF is a testament to Jordan's commitment to addressing long-term economic vulnerabilities and strengthening its balance of payments stability.
Jordan's economic journey is a testament to the power of resilience, reform, and international collaboration. As the country navigates global uncertainties and regional tensions, its commitment to macroeconomic stability and prudent economic management serves as an inspiration for other nations facing similar challenges.
Selected economic indicators for Jordan from 2024 to 2027 provide a glimpse into the country's economic trajectory. These indicators, including real GDP growth, consumer price inflation, fiscal operations, and external sector metrics, offer a comprehensive view of Jordan's economic performance and the impact of the IMF's support.
As Jordan continues its economic journey, the world watches with interest, hoping for a successful outcome that will benefit not only the country but also the region and the global economy.
