Jordan

Since completion of the first review, Jordan has preserved macroeconomic stability in a most difficult environment. It has weathered a series of severe and highly persistent shocks, including regional conflicts, domestic uncertainty, the hosting of Syrian refugees, the disruption of critical export markets, and rising borrowing costs. 2018 proved particularly challenging, but also saw important progress on key fiscal and structural reforms. While some slippages and delays, including a persistent shortfall in revenue collection, were a setback in the authorities’ fiscal consolidation efforts, most benchmarks from the first review have now been met (with the remainder expected to be met in the next few months). The authorities have passed a critical income-tax reform, which if implemented effectively, will result in a more balanced tax system, reducing exemptions, and supporting efforts against tax evasion. More importantly, they have formulated a comprehensive medium-term reform program to create the conditions for higher and more inclusive growth. Decisive implementation is now key to sustainably improve economic prospects.