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Jordan wins US$250 million World Bank loan after regional unrest
Source: BI-ME with Bloomberg , Author: Posted by BI-ME staff
Posted: Thu January 26, 2012 7:07 pm

INTERNATIONAL. The World Bank said it approved a US$250 million loan to Jordan to aid the nation in overcoming economic difficulties.

The loan “helps the country manage the global economic downturn and the short-term shocks caused by political events in the region,” the World Bank said in an e-mailed statement. It didn’t give details on the interest rate of the loan.

The kingdom’s economy was hurt by increasing food and fuel prices as tourism dropped 16 percent, remittances from expatriates fell 3% and foreign direct investment declined 32 percent last year due to regional unrest, it said.

“Social expenditures in response to these shocks, including large untargeted subsidies, have increased fiscal deficits and Jordan’s vulnerability to further shocks,” the World Bank said.

Jordan, one of the smallest economies in the Middle East, imports almost all of its energy needs and relies on foreign investment and grants to support its budget and current-account deficits.

Jordan’s energy bill is forecast to rise this year to 4 billion dinars (US$5.64 billion) from 3.5 billion dinars in 2011 because of disruption to natural-gas deliveries from Egypt and as consumption rises, Al Arab Al Yawm reported January 24, citing Energy Minister Qutaiba Abu Qura.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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INTERNATIONAL. Pretend and extend died last night, hopefully it will be replaced with a normal business cycle, normal ebbs and flows, but first politicians will try to save face by trying to do just one more round of pretend-and-extend, but the patient has died.
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