IMF clears path for release of US$294mil bailout tranche to Jordan

The International Monetary Fund (IMF) has approved the release of US$294 million as part of Jordan's four-year bailout program. This follows a staff-level agreement reached between the IMF and Jordanian authorities on Tuesday. The IMF mission chief, Cesar Serra, stated that Jordan's program performance has remained robust despite ongoing challenges and uncertainty caused by the prolonged war in the Middle East.

Jordan initiated a nearly US$1.2 billion bailout program in 2024, with an additional US$700 million added the following year. The latest tranche of funding is contingent upon approval by the IMF's executive board. In February, the United States and Israel initiated a war on Iran, causing regional violence and impacting Tehran's retaliatory actions against Washington's allies, including Jordan.

Despite the conflict's economic repercussions, Jordan has managed to avoid the worst consequences. The country's growth forecast for 2026 remains unchanged at 2.7%, largely due to the government's commitment to prudent macroeconomic policies, proactive measures to mitigate spill-overs from the regional conflict, and strong support from international partners.

However, the IMF has suggested that Jordan's efforts could be further strengthened by enhancing private sector competition, increasing labor market flexibility, and encouraging firms to enter the formal economy.