AMMAN, July 1 (Reuters) - The International Monetary Fund on Thursday said it had released $206 million to Jordan under a four-year $1.3 billion loan program, and approved Jordan's request to expand the program by $200 million to help it continue battling the COVID-19 pandemic.
The IMF said it completed a second review of Jordan's Extended Financing Facility and commended the country for meeting its fiscal targets despite fallout from the coronavirus pandemic.
Completion of the review allows Jordan to immediately access $206 million, bringing total disbursements to around $900 million since the start of 2020, the IMF said in a statement.
Augmenting the facility would let Jordan continue fiscal spending to address the COVID-19 crisis, the IMF said. But it said increased support from donors was needed to help Jordan cope with pandemic even as it hosts 1.3 million Syrian refugees.
It said the Middle Eastern country had shown a "strong performance" in implementing reforms, including working to close tax loopholes, but continued work was needed to increase the transparency of public finances.
Jordan's finance ministry, which first disclosed completion of the review, said the IMF encouraged Jordan's main Western and Arab donors to support the kingdom in "view of its strong commitment to stability and reforms" and its hosting of refugees.
Economic activity contracted by 3% in 2020, hit by lockdowns, border closures and a sharp fall in tourism during the pandemic, but the government and the IMF both predict a bounceback to growth this year.
The gradual reopening of most of Jordan’s key business and manufacturing activities in the last few months is helping its economy to consolidate a gradual recovery, economists say.
The IMF’s approval of Jordan’s second review signalled confidence in the country's tempo of reforms and fiscal stability, the ministry said.
Jordan’s finance minister, Mohammad Al Ississ, earlier this year said his country's commitment to IMF reforms helped it to maintain strong donor support and keep stable sovereign ratings at a time when other emerging markets were being downgraded.
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