Standard & Poor's: We expect that the Gaza war will not cause internal political turmoil in Jordan (Associated Press)

The Standard & Poor's credit rating agency announced that Jordan's long-term sovereign rating was fixed at "B+/B" with a stable outlook, but it warned that Israel's war on Gaza was affecting Jordan's tourism activity and limiting trade.

The agency said that the repercussions of the war increase regional tension, affect Jordan's tourism activity, and limit trade.

She added, "Jordan's stable outlook reflects our expectations that the war will not expand beyond the Gaza Strip."

The agency continued, "We expect that the war will not cause major internal political unrest in Jordan. We expect that international financial support for the country will remain strong."

The agency attributed the confirmation of Jordan's rating to the success of Jordanian financial policy in maintaining financial stability despite regional challenges, and the success of public finance in reducing the deficit and placing debt on a safe gradual decline curve, according to what was reported by the Jordanian News Agency (Petra).

The agency pointed to the success of monetary policy in maintaining monetary and banking stability in Jordan, indicating that Jordan has stable financial and monetary policies that will help it deal with the external crises facing the region, most notably the war in Gaza, according to what was reported by Petra Agency.

Regarding public finances, the agency’s forecasts indicate:

  • The success of the fiscal policy in reducing the general government deficit to 1.1% of GDP in 2024.

  • Reducing the percentage of net general government debt in the coming years to reach 78.9% in 2027.

  • Foreign reserves increased at the end of last January by $900 million since the beginning of the war in Gaza, reaching $19 billion.

  • The average ratio of the current account deficit to GDP is expected to decrease during the years 2024-2027 to reach 4.5% compared to 7.2% during the years 2020-2022.

Petra Agency quoted the Jordanian Minister of Finance, Muhammad Al-Issas, as saying, “The confirmation of Jordan’s credit rating despite the repercussions of the war on Gaza and the ongoing attacks in the West Bank, and despite the rise in regional uncertainty, represents a new testimony and confirmation by international institutions of the strength of public finances in Jordan, and evidence.” On the effectiveness of the economic and financial policies taken by the government to maintain financial stability.”

For his part, Governor of the Central Bank, Adel Al-Sharkas, said, “The confirmation of the credit rating and stable future outlook for Jordan by Standard & Poor’s comes as proof of the atmosphere of economic stability that the national economy enjoys.”

Source: Agencies