Jordan’s economy has remained strong despite the latest headwinds, including the war in Gaza, the International Monetary Fund (IMF) said on Thursday.

The country’s economy grew by 2.6% in 2023, supported by macro-economic policies and structural reforms, the IMF staff said in their preliminary findings after a visit to Jordan.

Jordan was also able to narrow considerably the current account deficit to less than 4% of GDP in 2023 and increase the gross usable international reserves to more than $17 billion.

Inflation dropped to 1.6% year-on-year in December 2023, while the banking system remains liquid, profitable and well-capitalised.

“Sound macro-economic policies and structural reforms over the past few years have demonstrably strengthened Jordan’s resilience, mitigating the impact of successive exogenous shocks, including the latest external headwinds, with growth reaching 2.6% in 2023,” the fund said in a statement.

While the Gaza conflict remains unresolved, the IMF said Jordan should continue to be able to navigate the headwinds, barring any significant regional escalation of the ongoing war.

However, the IMF said Jordan continues to require strong international support to help it cope with the headwinds, as well as continue to host several Syrian refugees.

A staff team from the IMF visited Amman during April 29 to May 9 this year. They reviewed the country’s economic programme, which was supported by the Extended Fund Facility (EFF) arrangement approved recently.

Last January, the IMF approved a $1.2 billion loan programme to support the country’s economic and financial reforms.

“The new programme is off to a strong start, despite a challenging external environment. All quantitative performance criteria and structural benchmarks for the first review were met and steady progress is being made toward achieving the programme’s overall objectives,” said Ron van Rooden, an IMF assistant director who led the staff team’s visit to Jordan.

(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com