publish date 2021-11-19 20:55:00
Ali Abbas, head of the International Monetary Fund’s mission to Jordan, expected that the total fund payments to Jordan for the period 2020-2024, including the amount withdrawn under the rapid financing instrument, will reach 1362.11 million Special Drawing Rights, about 1.95 billion dollars, and 329 million SDRs have been disbursed. Special drawings, about 469 million dollars, representing Jordan’s share of the general distribution made by the International Monetary Fund for the allocations of special drawing rights in August 2021.
A team of International Monetary Fund experts had concluded its discussions held remotely with the government, where the two parties reached an agreement at the expert level regarding the third performance review under the economic reform program that it developed and supported by the “Extended Fund Facility” and this agreement is subject to the approval of the Fund’s senior management and its board Executive.
Abbas said, in a press statement after concluding discussions with the government, that the preventive measures and vaccination campaign launched by Jordan contributed to mitigating the effects of mutated strains of the Covid-19 virus during the summer, noting that reopening the economy helped start the recovery, supported by targeted measures at the financial level. public and monetary policy.
Abbas expected that economic growth would reach about 2 percent in 2021, which still suffers from significant weaknesses, represented by the persistence of high unemployment, especially among young people, explaining that the weak demand in the family sector, as well as the delay in transmission due to the rise in the prices of primary commodities. Globally, to local markets, it led to curbing the inflation rate at the level of 1.8 percent on an annual basis at the end of September 2021.
Abbas also expected that the current account deficit will rise to about 9.5% of the output in 2021 due to the increase in fuel import prices and the increase in imports of intermediate goods, and that it will decrease to less than 5% during 2022, while it is expected that travel revenues will continue to gradually recover to close levels. Before the Corona pandemic.
He pointed out that despite the difficult conditions brought by the pandemic, sound economic policies have helped maintain macroeconomic stability, noting that the government is on the right track towards reducing the public financial deficit by 1 percent of GDP in 2021, due to institutional efforts made. in tackling tax evasion and improving tax compliance.
And he indicated that, at the same time, international reserves have maintained a comfortable level with the help of active monetary policy and strong external financing, noting that Jordan’s position in international markets remains strong, with narrow differences from peers in the region.
Abbas also expected that growth would accelerate in 2022, registering 2.7 percent, with the increase in the momentum of recovery, and the beginning of reaping the fruits of structural reforms, indicating that an agreement was reached on the financial goals for 2022, which will help stabilize the public debt, while allowing space to expand important social protection programs. Preserving jobs, supporting public investment, and then promoting a gradual recovery.
He stressed that, at the same time, the program will continue to provide the necessary resources for higher-than-expected health spending arising from the pandemic.
He pointed out that the public financial strategy will focus on expanding the tax base through continuing efforts to address tax evasion and close tax loopholes, indicating that it will be necessary to maintain this momentum for reform, especially through the adoption of a law that unifies tax and customs administration in the Aqaba Special Economic Zone under The Income, Sales Tax and Customs Department umbrella; incorporation of the rules of the place of taxation within the general sales tax law; Unifying and strengthening incentives governance, and strengthening tax and customs administration.
He pointed out that, based on the recommendations of the evaluation of the transparency of public finances for the year 2021, and the new law for the partnership between the public and private sectors, the government seeks to track, manage and better disclose public financial risks, with the aim of improving the efficiency of public finances and enhancing their transparency. These reforms will be necessary to keep public debt within limits. sustainable and maintain Jordan’s market access.
Abbas indicated that the monetary policy stance is still appropriate and in the coming period, policies should remain flexible and guided by data, so as to balance the need to consolidate recovery and maintain monetary and financial stability.
He expected, that international reserves would remain at comfortable levels in the medium term, indicating that they are at their lowest levels recorded over recent years.
He pointed out that the banking system enjoys a good level of capitalization and liquidity, and the volume of non-performing loans is at low levels, until mid-2021, and the imminent update of the “Financial Sector Assessment” program will be an opportunity to conduct a large-scale inventory of the changes in the financial sector since the previous update, including Impact of the COVID-19 pandemic.
And he indicated that there has been tangible progress achieved in strengthening the anti-money laundering and terrorist financing system, including the issuance of a new anti-money laundering law that complies with international standards. ).
Abbas stressed that the prospects for achieving strong, inclusive and sustainable growth depend on steady progress in structural reforms to support women’s participation in the workforce, increase labor market flexibility, encourage competition, and reduce the costs of doing business, including by lowering the cost of electricity for businesses, and strengthening governance and transparency. The government is working to mitigate the effects of climate change, especially on water scarcity.
He added, that providing strong support on concessional terms from donors remains a very important requirement, especially in light of the prolonged effects of the Corona pandemic, explaining that Jordan still bears a greater burden compared to other countries in supporting and hosting 1.3 million Syrian refugees, including providing vaccinations. All residents are equal.
A series of meetings were held with the Prime Minister, the Minister of Finance, the Minister of Planning and International Cooperation, the Governor of the Central Bank, a number of ministers, senior officials, members of Parliament, donors, representatives of the private sector and civil society.
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Source : اخبار الاردن