Fitch reaffirms Jordan's credit rating amid geopolitical struggles
Date
5/12/2024 9:39:41 AM
(MENAFN) Fitch Ratings Agency recently reaffirmed Jordan's sovereign credit rating at "BB-" for the long term, with a "stable" outlook, underscoring the nation's resilient financial position amidst a backdrop of geopolitical turbulence. The agency highlighted Jordan's commendable track record of implementing financial and economic reforms, bolstered by flexible financing mechanisms tied to the banking sector and the General Retirement Fund, as well as continued international support.
Despite the region's escalating geopolitical risks, including the ongoing conflict in Gaza, Houthi attacks on commercial vessels in the Red Sea, and simmering tensions between Israel and Iran, Fitch emphasized Jordan's ability to navigate these challenges. Jordan benefits from robust multilateral assistance, particularly from the United States, which provides both military and economic support, enhancing the nation's stability amidst external pressures.
Fitch acknowledged that while Jordan has successfully maintained economic and political stability despite external shocks, such as social unrest in neighboring regions and conflicts in neighboring countries, these factors have hampered economic growth and contributed to a rise in government debt. The agency cautioned that the persistence of the Gaza conflict poses a threat to Jordan's growth prospects and could exacerbate challenges associated with debt reduction, even if the conflict itself does not directly involve Jordan.
In summary, Fitch's affirmation of Jordan's credit rating reflects confidence in the nation's ability to weather geopolitical headwinds and sustain its economic resilience through ongoing reforms and international support. However, the agency warns that continued regional instability, particularly the conflict in Gaza, could pose significant hurdles to Jordan's economic growth and debt management efforts in the foreseeable future.
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