x Abu Dhabi, UAEFriday 28 July 2017

Jordan to get $500 million in fresh credit from IMF next month

Jordan is expected to receive $500 million from the IMF next month giving the country time to correct imbalances in the budget and balance of payments.

Jordan is expected to receive US$500 million in fresh credit from the IMF next month giving the country time to correct imbalances in the budget and balance of payments, the local newspaper al-Ghad reported on Monday.

According to sources at the Jordanian finance ministry, an official mission from the IMF will be visiting Jordan within the next few days to make sure the government has followed the guidelines for economic achievement as agreed between both parties, the paper said.

The $500m will comprise a second and third payment from the IMF following the $385m it paid to the kingdom last year, the sources said.

The loan is part of a total of $2 billion that the IMF is planning to provide Jordan with over three years. "The loan will provide the necessary liquidity to help Jordan get through a difficult period and make adjustments gradually," Kristina Kostial, the IMF mission chief, said in a statement.

The Jordanian economy has suffered a series of harsh blows that have pushed public finances deeper into deficit. A series of attacks on a gas pipeline running through the Sinai Peninsula have interrupted the supply of cheap Egyptian gas to Jordan, forcing the government to buy expensive heavy fuel on the open market. Political turmoil in the region has also kept away both foreign investors and western tourists – key sources of revenue for the Jordanian economy.

To curb deficits in the country's budgets, the government decided in November to increase fuel prices – including household gas – by up to 53 per cent.

The heaviest burden on Jordan's budget is imports of crude oil and fuel. The kingdom, home to about 6 million people, imports 96 per cent of its energy and consumes a little over 100,000 barrels a day.

 

* Dow Jones