Standard & Poor’s affirms Jordan’s credit rating

AMMAN — On Friday, sovereign credit rating agency Standard & Poor’s (S&P) affirmed Jordan’s credit rating as B+/B with a stable outlook, despite deep global shocks in recent years. 

“The stable outlook reflects that we expect Jordan's reform momentum and donor support will remain strong,” S&P reported. 

S&P’s rationale behind the affirmed rating and outlook is “Jordan’s economic outlook is starting to improve, aided by the government structural reform efforts. We expect Jordan’s real per capita income to keep rising from 2023 onwards, having declined over the past decade.” 

S&P further noted Jordan’s ongoing success in achieving fiscal consolidation, lowering deficit and debt, and enhancing domestic revenues. 

Jordan is implementing structural reforms focused on tax compliance, the rejuvenation of investment and the improvement of ease of doing business, which are putting Jordan on the correct trajectory towards sustainably increasing economic activity, the S&P’s report stated. 

As a result, S&P estimates that the real Gross Domestic Product (GDP) growth will rise gradually, averaging 3 per cent in 2023-2026. The agency also projects that the net general government debt-to-GDP ratio will continue to decline to an estimated 77 per cent by 2026. 

S&P recognised Jordan’s increase in domestic tax revenues for the first half of the year, which are up 7.3 per cent compared with the same period in 2022.

Further, the agency complemented Jordan for its preemptive stockpiling of key food staples, and long-term and price-sticky gas import contracts, which have helped contain inflation. 

Commenting on the rating’s outlook, Minister of Finance Mohamad Al-Ississ said: “This affirmation of Jordan’s credit rating comes as yet another global validation of Jordan’s success in securing its stability in the face of global crises. The numerous international testaments confirm the success of Jordan’s fiscal policy in furnishing the vital infrastructure to enable growth and job creation.” 

“We succeeded in protecting our middle class from dangerous repercussions currently faced by other countries that have forgone their macrostability. Importantly, the government was able to achieve this without increasing the tax burden on citizens,” he added.

Governor of the Central Bank of Jordan (CBJ) Adel Al Sharkas affirmed that stabilising the credit rating and the outlook of the economy in light of an unfavourable geopolitical and economic global environment, sends a positive and reassuring message from specialised international agencies on Jordan’s economic trajectory. This reinforces Jordan’s attractiveness as a destination for safe, long-term investments. 

The rating affirmation reflects Jordan’s success in safeguarding its macroeconomic fundamentals and reflects the confidence of international agencies in the monetary and financial policies of the CBJ, he added.