RIYADH: Fitch Ratings has confirmed that Jordan has maintained economic stability amidst regional challenges, holding a “BB-” rating with a stable outlook.
The agency noted that the country’s score reflects a heightened vulnerability to default risk, particularly in the face of adverse business or economic changes.
Highlighting Jordan’s commitment to fiscal consolidation, Fitch predicted a decline in the general government budget deficit to 2.2 percent of gross domestic product (5.2 percent at the central government level) in 2023, compared to 2.7 percent in 2022.
Minister of Finance Mohammad Al-Ississ underscored the significance of maintaining Jordan’s credit rating amidst regional uncertainties, considering it “a testament to the resilience of the Jordanian economy.”
Al-Ississ noted: “The need for ongoing measures to ensure financial stability while safeguarding the middle class and avoiding additional tax burdens on citizens.”
According to the Fitch website: “Jordan has a record of maintaining economic and political stability despite significant external shocks including social instability in the region (Arab Spring) and wars in neighboring countries (Iraq and Syria), but these shocks have led to lower growth and significant government debt build-up.”
The country’s ratings are supported by a record of macroeconomic stability, progress in fiscal and economic reforms, and resilient financing linked to the liquid banking sector, as well as the public pension fund and international support.
The agency said the assessments are constrained by high government debt, weak growth and domestic and regional political risks as well as a sizeable current account deficit, and net external debt higher than rating peers.
It acknowledged Jordan’s successful completion of its seventh review under the Extended Fund Facility, which is expected to be completed in March 2024. The country also secured a staff-level agreement with the International Monetary Fund for a new four-year EFF amounting to $1.2 billion.
