|Author (Corporate)||European Commission|
|Series Details||COM (2019) 411|
Proposal presented on 4 September 2019 by the European Commission providing further macro-financial assistance (MFA) in order to support Jordan’s efforts to preserve macroeconomic stability and enhance growth prospects.
The objective of the proposed MFA is to help Jordan cover part of its additional external financing needs in 2020-2021, reducing the economy’s short-term balance-of-payment and fiscal vulnerabilities as well as contributing to the debt sustainability. In addition, the EU assistance would provide incentives to step up Jordan’s reform efforts through a Memorandum of Understanding, to be agreed with the Jordanian authorities, setting out an appropriate package of measures supporting economic adjustment and structural reforms.
In recent years, the Jordanian economy has been significantly affected by regional unrest, notably in neighbouring Iraq and Syria. This regional unrest has taken a heavy toll on external receipts and has strained public finances. Lower tourism and foreign direct investment inflows, blocked trade routes for 8 years, and repeated disruptions to the flow of natural gas from Egypt, have put a drag on growth and weighed on Jordan’s external and fiscal position.
A broadly appropriate policy response and large-scale international support helped the country to preserve macroeconomic stability and prevented an economic contraction. However, Jordan’s economy remains vulnerable to external shocks. Jordan continues to face considerable external financing needs including payment obligations on Eurobonds and other external market borrowing which comes due in 2020-22. In this context, continued support from Jordan’s international partners remains essential.
|Subject Categories||Economic and Financial Affairs|
|Subject Tags||Economic Governance | Situation|
|Keywords||Macro-Financial Assistance [MFA]
|Countries / Regions||Jordan|
|International Organisations||European Union [EU]|