Fitch affirms Jordan’s credit rating with a stable outlook despite regional instability
The sovereign credit rating agency Fitch upheld Jordan’s rating at ‘BB-’ with a stable outlook undeterred by the challenging regional circumstances, demonstrating the country’s record of macroeconomic stability, robust fiscal and economic reforms, and resilience in the banking sector. Despite the geopolitical situation, Fitch cited that Jordan remains on a positive trajectory backed by a strong public pension fund and international support.
Commenting on the rating’s outlook, Minister of Finance Mohamad Al-Ississ affirmed that "Jordan’s affirmed credit rating in light of the unstable regional circumstances is testament to our resilience. We will continue to attempt to safeguard the middle class against exogenous shocks, and avoid increasing the tax burden.”
Fitch recognizes Jordan’s commitment to reform-driven fiscal consolidation, which is placing Jordan on the correct path towards declining general government budget deficit. Fitch forecasts a decline in general government budget deficit to 2.2% of Gross Domestic Product (GDP) in 2023 from 2.7% in 2022, reflecting strong revenue performance and efficient expenditure.
In its assessment of Jordan’s stability, Fitch interpreted Jordan successfully completing its seventh review under the current Extended Fund Facility (EFF) with the International Monetary Fund (IMF), and reaching a Staff-Level Agreement with the IMF for a new four-year EFF amounting to $1.2 billion, as a signal of Jordan’s commitment to a sound fiscal strategy, targeting government debt of 80% of GDP in 2028, and to support investor confidence and to maintain the reform momentum to improve the competitiveness, efficiency and job creation potential of the economy.
Adel Al-Sharkas, the Governor of the CBJ, expressed that Fitch’s decision to stabilize Jordan’s credit rating and outlook serves as a reassurance of the country’s capability to confront challenges. It demonstrates Jordan’s economic capacity to absorb difficulties with resilience and respond effectively through sound economic strategies. This affirmation, coupled with the successful completion of the EFF’s seventh review’s requirements in collaboration with the IMF conveys a promising message that underscores Jordan’s robust macroeconomic foundations supported by the stable monetary and exchange environments it has created. Sharkas emphasizes that the projection of low inflation, approximately 2%, and the maintenance of an adequate level of international reserves exceeding JD 17.4 million are notable achievements. Additionally, efforts to reduce dollarization to 18.3% of total deposits contribute to a resilient, liquid and well-capitalized banking system. This affirmed rating enhances Jordan’s appeal as a secure destination long-term investments and job creation.