Thursday 28th of March 2024 Sahafi.jo | Ammanxchange.com
  • Last Update
    21-Nov-2022

Moody’s credit rating evidence of promising economic reforms in Jordan — economists

 

The Jordan Times

 

AMMAN — Moody’s latest rating of Jordan, which has upgraded its credit outlook from B1 — stable to B1 — positive, indicates promising economic and financial reforms in the Kingdom, according to experts. 
 
According to Moody’s, “the change in outlook to positive from stable is driven by the government’s strong commitment to wide-ranging structural reforms and track record of effective implementation at least on the fiscal front, which have the potential to raise the resilience of its credit profile”. 
 
Economist Hosam Ayesh noted that Moody’s report provides decision makers, including investors and creditors, with an “independent and detailed” analysis of various economies, with a focus on credit risk. 
 
Jordan’s advancement in its rating, “although minor”, indicates an improvement in itsoverall economic situation, which will help attract more investments in the Kingdom, he told The Jordan Times 
 
It will also enable the country to acquire loans with reduced interest rates and fees, therefore “enhancing its public debt management”, he added, noting that Jordan pays roughly JD1.5 billion per year in interests.
 
WhileB1/B+ credit ratings are still “relatively risky and unfavourably viewed”, an improvement, indicating economic stability, is still to be commended, considering the surrounding “regional tribulations and pressures”, Ayesh continued. 
 
Economist Wajdi Makhamreh noted that Jordan’s credit rating this year is evidence that the government has met its obligations in regard to financial reforms, especially those relating to tax evasion. 
 
He added that Jordan’s “reform progress and economic stability” was also highlighted in the World Bank’s fifth review of the government’s economic reform programme supported by the Extended Fund Facility (EFF) arrangement.
 
“This will definitely encourage investments because it shows that the government is following a clear economic structure and transparent fiscal policies,” he told The Jordan Times. 
 
The improvement in its credit rating also shows Jordan’s commitment to increasing its revenue and reducing its deficit, which in turn enhances its financial reputation and allows it to not only benefit from reduced interest rates, but also to take part in regional cooperations and investments, Makhamreh continued. 
 
He also noted that it’s important to learn from the experiences of other countries and make sure that the economic modernisation vision is realised by implementing a comprehensive plan within a set timeline, “ensuring accountability and benefitting from local expertise and competencies away from bureaucracies”. 
 
“We hope that next year brings a stable and inviting environment for local, regional and global investments in Jordan,” Makhamreh added. 
 
Isam Qaddamani, also an economic expert, said that although this is a minor improvement in terms of ratings, it’s still a positive economic indicator that “the country’s debts and deficit ratios are under control, with ongoing plans for reform”. 
 
He also stressed that the Moody’s rating can help encourage investments in Jordan and increase the “credibility” of its issued Eurobonds. 
 
Moreover the rating indicates a growth in the gross domestic product, which can be mostly attributed to Jordan’s tourism and energy revenues in addition to its returns from mineral exports, including potash, phosphate and fertilisers, he told The Jordan Times. 
 

Latest News

 

Most Read Articles