Standard & Poor’s keeps Jordan’s credit rating unchanged

AMMAN — Standard & Poor’s (S&P) has affirmed its B+/B credit rating to Jordan, the Jordan News Agency, Petra, reported on Saturday.

S&P said that Jordan’s outlook remains stable, according to Reuters. 

The New York-based organisation expected Jordan’s debt position to broadly stabilise, supported by bilateral and multilateral grants and phased implementation of fiscal reforms. 

The agency also expected donors to continue to support Jordan amid the ongoing conflict in Syria and fiscal pressures resulting from refugee inflows. 

Nonetheless, S&P expected some decrease in donor support for Jordan, particularly budget support over the coming years, Reuters added. 

The rating was based on the government’s ability, according to the report, to maintain the debt rate in 2017 when compared to the rate registered in 2016, in addition to the adoption of fiscal reforms in 2018 within the General Budget Law, Petra reported.

Finance Minister Omar Malhas stressed that the Kingdom’s efforts in attracting investments and assistance, including the aid agreement that was recently signed with the US, contributed to reaffirming Jordan’s rating as stable.

This positive rating is attributed to several factors including the government’s ability to contain financial deficits and maintain a stable debt rate at 95.1 per cent, despite the low economic growth.

Credit ratings may play a useful role in enabling corporations and governments to raise money in the capital markets. Instead of taking a loan from a bank, these entities sometimes borrow money directly from investors by issuing bonds or notes, according to S&P website. 

Investors purchase these debt securities, such as municipal bonds, expecting to receive interest plus the return of their principal. Credit ratings may facilitate the process of issuing and purchasing bonds and other debt issues by providing an “efficient, widely recognised, and long-standing measure of relative credit risk”, the rating agency added.