RIYADH: Jordan’s macroeconomic stability has led to Fitch Ratings affirming its long-term foreign currency issuer default ratings at BB- with a stable outlook. This confirmation highlights the country’s progress in fiscal and economic reforms, alongside resilient financing supported by its liquid banking sector, public pension fund, and international assistance, as outlined in a press release. However, the country’s ratings are constrained by high government debt, weak growth, and risks in domestic and regional politics. “Jordan has preserved economic and political stability despite significant external shocks, including social instability in the region (Arab Spring) and wars in neighboring countries (Iraq and Syria), but these shocks have led to lower growth and significant government debt build-up,” stated Fitch in the report. It further noted: “A prolonged or expanded Gaza conflict, even if it does not involve Jordan directly, could weaken growth prospects and increase the challenges for debt reduction.” The analysis also pointed out that current account deficits and net external debt higher than rating peers have negatively impacted Jordan’s position. According to the US-based agency, a BB- rating signifies an elevated vulnerability to default risk, particularly in the event of adverse business or economic changes. This rating also indicates that there is business or financial flexibility in the country that supports the servicing of financial commitments. Fitch further noted that Jordan’s government maintains its commitment to advancing its three pillars: economic, public administration, and political reform agenda despite the external challenges. The report added that Jordan’s economy expanded by 2.6 percent in 2023. However, the rate of growth is expected to contract to 2.3 percent this year, driven by lower tourism inflows, weaker external trade performance, and continued regional political uncertainty. Fitch noted that if geopolitical risks ease, the country’s economy is expected to grow by 2.8 percent in 2025. The credit rating agency also highlighted that Jordan’s general government deficit increased to 3 percent of gross domestic production in 2023. This reflects a wider central government deficit, which stood at 5.2 percent of GDP. “We project that the deficit will ease to 2.6 percent and 2.4 percent in 2024 and 2025, respectively, as expenditure restraint will balance lower-than-budgeted revenue growth and higher interest payments,” added Fitch.