The sixth reviTew of the economic reform programme between Jordan and the International Monetary Fund (IMF), expected to take place this month, carries exceptional significance. It is closely tied to the programme’s commitments and comes at the end of a year in which regional developments have placed financial and economic pressure on Jordan’s economy, necessitating a reassessment of some of the assumptions underpinning the state budget.

 

Political, security and military volatility has had direct consequences, ranging from higher energy costs and interruptions to gas supplies at certain periods to increased shipping and insurance costs and disruptions to supply chains. These developments have affected production and imports while placing additional burdens on public finances.

 

Despite these challenges, Jordan’s economy has demonstrated resilience, supported by monetary and fiscal policies and government efforts to maintain stability and meet its obligations. Real gross domestic product grew by 3% in the second quarter of 2026 compared with the same period a year earlier, with manufacturing growing by 6.2% and agriculture by 7.8%. Inflation stood at 2.26% during the first nine months of the year.

 

External indicators further reinforce this performance. Total foreign reserves reached $28.47 billion at the end of September 2026, while incoming workers’ remittances rose by 14.1% to $2.97 billion during the first seven months of the year. Tourism income reached $5.56 billion in the first eight months, up 2.9%, while national exports increased by 4.6% to JD5.51 billion during the first seven months. These indicators provide an economic foundation that strengthens Jordan’s position in negotiations and helps it absorb additional pressures.

 

The first key dimension of the review concerns addressing the fiscal cost of external shocks. Current estimates point to additional burdens exceeding JD400 million compared with initial projections, putting the Treasury to the test in managing the deficit, expenditure and financing. The review will provide an opportunity to discuss the realism of fiscal assumptions and the possibility of adjusting targets to reflect exceptional circumstances.

 

The fifth review raised the central government’s primary deficit target for 2026 to 1.4% of GDP, excluding grants and transfers to public utilities, while securing an additional $200 million in grants. The new review could provide an opportunity to discuss additional flexibility, subject to agreement, that takes the scale of regional shocks into account, eases pressure and preserves the course of reform.

 

The second dimension concerns the 2027 budget, which requires realistic estimates of revenue, expenditure and the deficit while protecting capital spending. The 2026 budget allocated around JD1.6 billion for capital expenditure, including JD396 million for projects under the Economic Modernisation Vision, JD60 million for the National Water Carrier project and JD35 million for exploration at the Risha gas field.

 

Protecting these priorities becomes even more important as the 2026–2029 Economic Modernisation Vision programme is implemented. The programme has an indicative cost of JD3.8 billion, including JD1.3 billion for 2026, alongside major investment projects with an estimated cost of JD7.8 billion. Depending on the outcome of negotiations, additional flexibility in the primary deficit for the 2027 budget could be considered in line with development spending priorities, helping sustain projects and stimulate growth.

 

The third dimension concerns the future of Jordan’s relationship with the IMF. A successful review would open the door to assessing options for cooperation beyond the current programme, including a new four-year programme or an alternative economic and financial framework that ensures continued reform and stability in line with the needs of the economy and the understanding reached with the Fund.

 

Successful reviews also unlock financing to support external and fiscal needs. The fifth review, in June 2026, made approximately $134 million available under the Extended Fund Facility and $54 million under the Resilience and Sustainability Facility, bringing the total to $188 million.

 

The review is a test of how to reconcile fiscal stability with the cost of regional shocks. What is needed is a realistic and flexible outcome that supports growth and government plans while maintaining fiscal discipline, without imposing costs on the economy and citizens that exceed their capacity to bear them.