Amman, June 30 (Petra) - - Minister of Finance, Dr. Abdul Hakim Al-Shibli, affirmed the Kingdom’s firm commitment to its fiscal and economic reform agenda, implemented in close partnership with the International Monetary Fund (IMF).

The program, he noted, is designed to safeguard macroeconomic and financial stability, accelerate structural reforms, stimulate sustainable growth, and place public debt on a firm downward trajectory toward 80% of GDP by 2028.

In a press statement on Monday, Al-Shibli explained that the reform package aligns with Jordan’s Economic Modernization Vision and encompasses a broad array of structural measures, including enhancements to tax compliance, expansion of the tax base, fiscal sustainability in the electricity sector, improvements in public service delivery, and a more conducive environment for private sector-led job creation.

He underscored that the successful completion of the third review under the national reform program constitutes a strong vote of confidence in Jordan’s economic resilience and the effectiveness of its fiscal and monetary policies, especially amid regional instability. The conclusion of this review will unlock an immediate disbursement of $134 million from the IMF, providing a further boost to liquidity and investor confidence.

Al-Shibli noted that the IMF’s commendation of Jordan’s reform efforts and stronger-than-expected economic performance with GDP growth in 2024 reaching 2.5% compared to a forecast of 2.3% has contributed to the continued stability of the Kingdom’s sovereign credit rating.

Addressing public concerns that IMF-backed reforms might translate into higher taxes or austerity measures, Al-Shibli emphasized that Jordan’s engagement with the Fund is rooted in a collaborative and nationally driven framework. "From the outset, Jordan has insisted that the program’s objectives align with our national strategies particularly the Economic Modernization Vision while ensuring no additional financial burdens are placed on citizens," he said.

As evidence of this commitment, he pointed to a series of recent government measures aimed at easing the cost of living, including the reduction of taxes on vehicles and increased budget allocations for healthcare services. Notably, the government recently expanded cancer coverage through an agreement with the King Hussein Cancer Center, ensuring broader access to critical treatment.

Al-Shibli also highlighted the IMF Executive Board’s recent approval of a new $700 million Resilience and Sustainability Facility (RSF) as a testament to the international community’s confidence in Jordan’s reform trajectory. The facility, he said, will bolster Jordan’s capacity to pursue long-term fiscal sustainability in critical sectors such as energy, water, and health, while providing concessional financing for priority capital projects. The RSF aims to support energy efficiency, water resource management, and pandemic preparedness, all without adding to off-budget borrowing pressures.

Turning to the uptick in public debt in early 2025, which reached JOD 35.8 billion or 93% of GDP, Al-Shibli described the rise as temporary and already anticipated in the Ministry of Finance’s monthly bulletins for March and April. The increase, he explained, reflects borrowing to cover the fiscal deficit and operational losses at the National Electric Power Company (NEPCO) and the Water Authority, as well as the inflow of $1 billion in concessional loans from partner countries during the first quarter.

To optimize debt management, the government also issued sukuk at a competitive yield of 4.8%, enabling lower borrowing costs while funding key capital expenditures. Al-Shibli noted that the $1 billion in concessional funds was deposited with the Central Bank and appeared on the debt ledger as of end-April. However, these funds were strategically deployed to redeem $1 billion in Eurobonds maturing this week without the need for new issuance, which under prevailing global conditions could have carried interest rates as high as 9%.

As a result, the Minister projected that the public debt stock will decline to approximately JOD 35.3 billion by the end of June. The debt-to-GDP ratio excluding debt held by the Social Security Investment Fund is also expected to decline to around 91%, reinforcing the government’s fiscal consolidation path.

//Petra// AA

30/06/2025 21:44:10