IMF says Jordan price hike important step

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Jordan insists the price hike was “unavoidable” given the country’s $5-billion (3.9-billion-euro) budget deficit, and that the measures would save $42 million by year end.

The country relies on imports for 95 percent of its energy needs and has been struggling to find affordable alternatives to Egyptian gas supplies, which have been repeatedly hit by sabotage.

Amman has said Cairo resumed this month full gas supply of 250 million cubic meters (8.8 billion cubic feet) a day.

“Jordan performed well under the program in 2012. The country has faced challenges during the year from the disruption of the flow of natural gas, the ongoing conflict in Syria, and an acceleration of influx of refugees,” the IMF said.

“Combined with higher oil and food prices and a shortfall in grants, this has put further pressure on the country’s economy. Nonetheless, growth is expected to increase slightly to 3 percent compared with 2.6 percent in 2011.”

Following a December 3 to 20 visit to Jordan, the IMF expected average inflation to be around 5 percent for the year.

The IMF said it plans to discuss with Jordan a 2013 plan to help address issues like hosting more 250,000 Syrian refugees who have fled the unrest in their homeland.

“This program will include specific policy measures that would help Jordan to reach its program objectives and address the key challenges it faces, including the large inflow of Syrian refugees,” it said.

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