The International rating agency Standard & Poor’s has lowered the country’s long-term rating from BB to B, mainly due to weak fiscal flexibility and rising public debt and due to a number of national and regional factors.

Jordan was placed in the seventh group of BICRA, along with Bulgaria, El Salvador, Indonesia, Morocco, the Philippines, Portugal and Slovenia.

The report cited “tax resistance”and credit risk in Jordan, with “intermediate” economic imbalances, while industrial factorswere described in a “high” institutional framework, characterised by competitiveness.

S&P’s report states that regional tensions continue to challenge economic growth. However, it states that the reopening of trade routes with Iraq should benefit from export and transit revenues and thus reduce financial and economic burdens. The report noted the “comforting” performance of the Jordanian banking system and fiscal policies of the Jordanian central bank, despite a slight decline in foreign exchange reserves due to the need to balance the losses caused by the closure of the borders with neighboring countries.

Jordanian economist Mifleh Aqel said he disagreed with the negative outlook given by S & P report, arguing it did not take into account the economic indicators for the first quarter of this year. The economist stressed that the vital sectors recorded positive performance indicators over the last three months, including tourism, exports and remittances by Jordanian expatriates, citing good financial market activity this time of year. He also noted that the Jordanian economy survived 6 years of conflict in Syria and a year of border closure with Iraq. As for investments, he said the whole region is witnessing a drop in the volume of investments, mainly due to the fall in oil prices.


Source: medNews