Tuesday 03, July 2018 by Bloomberg

Jordan seeks to renegotiate terms of $700 million IMF loan

 

The kingdom wants to extend the program beyond its current 36 months and revisit some targets

Jordan wants to renegotiate the terms of a $700 million International Monetary Fund loan because of the Kingdom’s difficult economic conditions, Deputy Prime Minister Rajai Muasher said.

The kingdom wants to extend the programme beyond its current 36 months and revisit some targets, Muasher said at a news conference on Monday, without giving details. Under the terms of the extended fund facility that Jordan and the IMF negotiated in 2016, the Kingdom was to have implemented reforms that would have generated an additional JOD 540 million ($761 million) this year, but state revenue in the first half was much lower than forecast.

Jordanian officials are to meet soon with the IMF in Amman, Muasher said. At that meeting, Jordan will present a national economic and fiscal reform plan that takes current political and social conditions into account, Muasher said.

Jordan is "fully committed" to the IMF programme and the national plan "will be in line with IMF objectives and that will help realise sustainable development," Minister of State for Media Affairs Jumana Ghunaimat said in a statement. "In light of the current economic conditions and the difficult regional conditions, Jordan is trying to come up with solutions to address its economic and financial difficulties."

Hardship has deepened since the government raised prices on food staples to narrow its budget deficit, and unemployment has reached 18.5 per cent, the highest in two decades.

An attempt to raise the income tax led to protests that brought about the collapse of the previous Government last month and the withdrawal of the proposed levy.

Finance Minister Ezzeddine Kankarieh told reporters that the economy grew 1.9 per cent in the first quarter. State revenue was JOD 400 million short of forecast in the first six months of the year, he said.

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