Building on progress made in recent years, the authorities will continue with a gradual fiscal consolidation—supported by measures to broaden the tax base and improve tax compliance and spending efficiency—to place public debt on a steady downward path, while creating space for priority social and capital spending. The planned expansion of social assistance, with further improvements in targeting, will be key to ensuring adequate protection of vulnerable households. Improving the efficiency and viability of public utilities also remains crucial for preserving the sustainability of public finances, while ensuring the delivery of essential services.
“The Central Bank of Jordan maintained its prudent policies, which have safeguarded the peg to the U.S. dollar and provided financial stability. The peg has served Jordan well and helped keeping inflation low. Monetary policy should continue to focus on preserving monetary and financial stability, by adjusting policy rates as needed to support the peg. The banking sector remains healthy, while solid progress in strengthening financial integrity allowed Jordan to be removed from FATF’s grey list. Implementation of the recommendations of the 2023 IMF-World Bank Financial System Stability Assessment will be important to further strengthen financial sector oversight.
“Further progress in implementing structural reforms to improve the business environment and attract private investment is crucial to create a dynamic private sector, foster job-rich growth, and achieve the objectives of Jordan’s Economic Modernization Vision. In this regard, strengthening competition, further reducing red tape, and pressing ahead with labor market reforms to increase flexibility, lower youth unemployment, and enhance female labor participation are critical. Donor support remains essential to help Jordan navigate the challenging external environment, host the large number of refugees, and maintain the reform momentum.”
