Moody’s Upgrades Jordan’s Credit Rating

May 21, 2024

Moody’s Investors Service upgraded the Government of Jordan’s credit rating. “This is the first sovereign credit upgrade for Jordan in 21 years,” said Minister of Finance Mohammad Al-Ississ. “It is an international acknowledgment of Jordan’s ambitious reform agenda, which has significantly boosted our economic growth.”

The credit rating upgrade was facilitated in part by two DAI projects in Jordan. The Public Financial Management and Administration (PFMA) Activity, funded by the U.S. Agency for International Development (USAID), strengthened Jordan’s fiscal stability and governance, while the Macroeconomic Advisory Support for the Government of Jordan program, funded by the U.K. Foreign, Commonwealth & Development Office, provided crucial credit rating advice and technical assistance to the government.

moodys.jpgPhoto: USAID Jordan.

“This achievement is remarkable given the challenging regional backdrop of the past few years: the COVID-19 pandemic, high global energy, and food prices due to the Russia-Ukraine conflict, and, more recently, tensions emanating from the Israel-Palestine conflict,” said Feras Momani, DAI’s Country Representative in Jordan.

The milestone reflects confidence in the country’s economic policies and reforms, such as the Economic Modernization Vision and the Public Sector Modernization Roadmap. For the government, the new rating means lower borrowing costs, improved investor confidence, and greater access to international financial markets, which can lead to further economic development and infrastructure investment. For everyday citizens, the upgrade signals a more stable economic environment, potentially leading to job creation and improved public services.

USAID’s PFMA Activity has been pivotal in supporting Jordan’s efforts to enhance its fiscal stability and governance. In detailing its rationale for the upgrade, Moody’s highlighted the “digitalization of tax services and use of artificial intelligence to monitor tax compliance, harmonization of custom duties, unification of tax administration…and the installation of track and trace systems.” These advancements are directly attributable to the initiatives spearheaded by PFMA. By providing staff and technical assistance to the Ministry of Finance, PFMA also helped oversee Jordan’s Extended Fund Facility (EFF) with the International Monetary Fund; the successful conclusion of the first review of the EFF was another key factor in Moody’s decision.

The Macroeconomic Advisory Support Program, led by DAI and Cygnum Capital, provides credit rating advisory services and technical assistance to the government, helping Jordan implement effective reforms and maintain a stable economic environment. The program has built capacity within Jordan’s financial institutions, ensuring the Kingdom is better prepared to handle future economic challenges and sustain long-term growth.

Moody’s assigns credit ratings using a standardized scale of letters and numbers. Credit ratings range from Aaa, the highest rating indicating minimal risk, to C, indicating a high likelihood of default. Jordan’s new Ba3 rating is still considered “non-investment grade,” but is a big improvement from the previous B1 rating, which indicated higher risk and greater uncertainty for investors.

“As Jordan celebrates this significant achievement, DAI remains committed to supporting its reform momentum and strengthening its economic resilience,” said Momani.

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