WASHINGTON:The International Monetary Fund's executive board on Wednesday approved a new $1.2 billion, four-year loan program to support Jordan's economic reforms, replacing a previous program that was set to expire in March 2024, the fund said.

The decision gives Jordan immediate access to an initial disbursement of about $190 million, with the remaining amount to be phased over the program, subject to program reviews, the IMF said.

The IMF reached a staff-level agreement with Jordan on the new reform program on Nov. 9, sending what Finance Minister Mohamad Al Ississ called a signal of confidence to investors.

Board approval of the new Extended Fund Facility comes amid growing concerns that the Israel-Gaza war could expand to become a bigger regional conflict.

The IMF said the new program would build on Jordan’s "consistently strong performance under the previous program" to support the Middle Eastern country's work on maintaining macro-stability, further building resilience and accelerating structural reforms.

It said the funds would allow Jordan to continue its gradual fiscal consolidation while protecting social and capital spending, improving the financial viability of the electricity sector, and safeguarding the exchange rate peg.

“Jordan has weathered well a series of shocks over the past few years, maintaining macro-stability and moderate economic growth thanks to adept policy making and sizable international support," said IMF Deputy Managing Director Kenji Okamura.

Jordan needs to make further progress in improving the business environment and attracting private investment to foster job-rich growth, the IMF said.

"In this regard, strengthening competition, further reducing red tape, and pressing ahead with labor market reforms to increase flexibility, lower youth unemployment, and enhance female labor participation are critical," Okamura said.

The IMF noted that donor support remained essential to help Jordan navigate the "challenging external environment, host the large number of refugees, and maintain the reform momentum." (Reporting by Andrea Shalal; Editing by Leslie Adler)