IMF highlights Jordan’s resilience amid Gaza conflict’s economic impact

Jordan has effectively managed to overcome the economic difficulties stemming from the war in Gaza through several fiscal measures, according to the Washington-based lender IMF.

Jihad Azour, the director of the Middle East and Central Asia Department at the IMF, commended Jordan’s economy, stating that it successfully navigated the anticipated challenges arising from the Israeli war on Gaza, according to the Jordan News Agency.

During a conference discussing the economic forecast for the Middle East and North Africa region, Azour recommended that Jordanian authorities implement effective financial and monetary policies to safeguard against potential spillover effects from the Gaza conflict.

Azour emphasized the positive impact of the recent government-IMF program, asserting that it played a crucial role in activating economic and financial measures.

This, in turn, strengthened the solvency of public finances, providing Jordan with increased borrowing opportunities at favorable interest rates in alignment with national economic reforms, according to the director.

The IMF’s latest report anticipates a decline in Jordan’s economic growth for 2024, projecting a rate of 2.6 percent, down from the earlier estimate of 3 percent growth for the year.

The report underscored that the Israeli war on the Gaza Strip has served as a significant shock to the MENA region, posing economic challenges for neighboring countries.

Azour noted that regional developments have led to a 0.5 percentage point reduction in the expected growth of economies for 2024, settling at 2.9 percent.

Moreover, he highlighted that inflation is projected to persistently decline in most economies across the region, maintaining a negative trajectory for the average growth in low-income countries in the current year.

After completing the fifth review of Jordan’s program supported by the extended fund facility, the IMF Executive Board stated that the country has sustained a broad-based recovery amid a challenging external environment, thanks to the authorities’ effective policy response.

Following the board’s discussion, Kenji Okamura, deputy managing director and acting chair, said that: “Going forward, policies should remain focused on maintaining macroeconomic stability, protecting the vulnerable segments, and advancing reforms to boost employment, growth, and competitiveness.”