IMF reaches $2 billion loan agreement with Jordan

Reuters News
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Posted: Jul 25, 2012 9:54 AM
IMF reaches $2 billion loan agreement with Jordan

WASHINGTON (Reuters) - The International Monetary Fund on Wednesday reached a $2 billion loan agreement with Jordan, where the economy has been slowed by higher oil prices and uncertainty in the aftermath of the region's Arab Spring protests.

"The IMF staff agreed to support Jordan's agenda for a socially acceptable fiscal consolidation," the IMF said in a statement. "It will provide liquidity during the next three years, which will allow the authorities to gradually implement their agenda".

It said Jordan's economy had been hit by exogenous shocks that were outside the government's control.

The IMF said government finances were being strained by repeated disruptions to natural gas flows from Egypt that have pushed up energy prices.

Regional political tensions, coming from Syria and Egypt, and a slowing global economy have hit tourism to Jordan and caused a drop in worker remittances and foreign direct investment, the IMF said.

The fund said the IMF-backed program would seek to correct fiscal imbalances and promote policies to boost growth.

Government data last month showed economic growth had slowed to 3 percent year on year in the first quarter of 2012 due to sluggish private sector growth.

(Reporting by Lesley Wroughton; Editing by James Dalgleish)