The IMF on Lifting Subsidies on Bread

IMF Opposes Lifting Bread Subsidies

The International Monetary Fund (IMF) said it doesn’t recommend lifting subsidies on bread in Jordan, a controversial step the government is considering in an effort to balance its budget.

“The IMF does not recommend lifting bread subsidies and does not recommend economic measures that burden the poor in Jordan,” the IMF said in a statement. “The design of policy measures must consider the impact on the Jordanian economy and on the poor.”

Mohammed Momani, the government’s spokesperson, said this month that ministers were in the final stages of deciding on whether to lift or keep bread subsidies, which are estimated to cost around JD140 million a year. The Kingdom’s public debt ratio to GDP currently stands at 95 percent.

Earlier this month, Jihad Azour, the IMF’s regional director, said fiscal measures taken by the government to tackle its economic challenges, including new taxes, should not target the poor.

The IMF expects Jordan’s GDP to grow by 2.3 percent this year, and rise to 2.5 percent in 2018. The IMF said the Kingdom’s economy has been negatively affected by instability in the region, particularly the Syrian and Iraqi crises.