The International Monetary Fund (IMF) has warned that the continuation of the Israeli war against Gaza for more than a year and its expansion could lead the Kingdom's economic growth to slow down to less than 2 per cent.In a report cited by the government-owned Al Mamlaka TV, the IMF noted that the economic impact of the war "depends on its duration and intensity, with a certain degree of unpredictability".In a baseline scenario where the conflict is contained, the IMF expected a "relatively limited" impact on the Jordanian economy due to its resilience, diversified energy sources, foreign exchange revenues and robust reserves."The immediate negative impact of the conflict is mainly felt in the tourism sector. In the event the conflict continues, economic growth is expected to fall to around 2.6per cent in 2023 and 2024, compared with earlier projections of almost 3per cent in 2024," the report said.IMF report said that the current impact of the war on Gaza is concentrated on the tourism sector as a result of the cancellations by tourists from advanced economies, which account for a third of tourism revenues, while "energy and other trade links" remain unaffected.In the event of a prolonged or escalating war scenario, the IMF warned of a "potential deterioration" in investor and consumer confidence, a significant decline in tourism revenues and a possible slowdown in economic growth, which could lead to deterioration in external balances and increased financing needs.The global lender said that such scenario could weaken foreign direct investment, making it more difficult to meet financing needs if international financial conditions become tighter or more fluctuate.In a prolonged conflict scenario, the IMF also warned of a potential impact on Jordan's ability to access capital markets and other emerging border markets, as well as the possibility of disrupted energy supplies or increased costs.In case of prolonged war, IMF said that growth in Jordan could slow to less than 2per cent, leading to deterioration in the overall fiscal and current accounts and an increase in public debt."Jordan needs to implement contingency measures to grapple with the potential impact of deterioration, by allocating a larger amount to the contingency fund in the budget, cutting spending in non-priority areas, and making room for more social support," the IMF said. The Jordanian government is working to secure additional grants in the budget to provide additional resources to deal with any new shocks, IMF said.  (ICE AMMAN)

Fonte notizia: JORDAN TIMES