Standard Chartered Bank indicated that Saudi Arabia, the UAE and Kuwait stepped in to provide financial support to Jordan, after the International Monetary Fund's mandated reforms triggered anti-austerity protests and led to the resignation of Prime Minister Hani Al-Mulki. It noted that the three countries pledged $2.5bn in deposits at the Central Bank of Jordan. It added that Qatar followed with a $500m investment pledge that aims to create jobs and address the high unemployment rate. It said that the pledges came amid the country's large fiscal and external financing requirements, high unemployment rate of about 18%, and anti-austerity protests in opposition to IMF-mandated taxes. In parallel, it noted that the IMF welcomed the pledges as a positive step for Jordan and plans to work with the new government. However, it considered that the completion of the IMF's second review will still require Jordan's commitment to fiscal reforms. Further, it considered that the pledges would create space for policy-makers to pursue more politically-acceptable austerity measures. But it considered that the aid would not address Jordan's structural macroeconomic challenges, including its elevated public debt level of 94% of GDP. However, it indicated that it is still unclear if the GCC pledges would replace the IMF support. It said that Jordan's growth prospects depend on the impact of the GCC pledges, the new government's handling of reforms and future negotiations with the IMF.
Source: Standard Chartered Bank