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Jordan’s economic outlook for 2015 positive – IMF

Inflation has also declined – primarily reflecting a slowdown in food and fuel prices – and stood at 2.4 per cent year-on-year in November

Jordan’s economy is on a path to stronger growth next year, though regional conflicts in Syria and Iraq continue to weigh on its economy, says IMF representative Kristina Kostial.

The economic outlook is positive. Growth is expected to increase to 3.8 per cent in 2015 while the current account will further narrow to 5.9 per cent of GDP, Kostial says in a statement at the end of her visit to Jordan.

The IMF projection for economic growth is lower than the forecast of the government, which based its 2015 draft budget law on a four per cent expansion in the GDP growth, which is expected to rise to 3.1 per cent this year, while unemployment has declined to 11.4 per cent in the third quarter, the Jordan Times reports the IMF representative as saying.

Inflation has also declined – primarily reflecting a slowdown in food and fuel prices – and stood at 2.4 per cent year-on-year in November, she adds.

Kostial notes the current account deficit continues to narrow and is estimated at 7.9 per cent of GDP for 2014 as a whole.

On the IMF-supported economic reform programme under a Stand-By Arrangement, Kostial says the programme is expected to remain broadly on track.

The central government budget has been tightly managed and international reserves remain at comfortable levels, the statement says. While the National Electric Power Company is affected by shortfalls in gas flows from Egypt, this is expected to be broadly offset by lower costs of oil imports.

The budget is projected to be supported by a new income tax law, which will contribute to a fairer tax system. It will provide further fiscal consolidation so as to put public debt on a firm downward path. Monetary policy will keep high foreign exchange reserve buffers, according the statement.

Kostial further notes: “In this regard, the mission welcomes the authorities’ new medium-term economic strategy, Vision 2025, the implementation of which could raise the standard of living of all Jordanians.”

According to the IMF official, the next mission to review Jordan’s economic performance is scheduled for early March 2015.