Mubasher: Moody's Investors Service has affirmed the Government of Jordan's long-term issuer and senior unsecured ratings at B1 and maintained the stable outlook.
The decision to affirm Jordan's B1 ratings reflects credit challenges posed by an increasingly adverse global financing and trade environment, in the context of very large current account deficits and declining foreign exchange reserves, and rising domestic social pressures, Moody’s said in a statement on Thursday.
It also takes into account credit supports such as the government's proven commitment to fiscal consolidation, strong and broad-based international commitment to support Jordan's economic, financial and social stability, and reforms of Jordan's energy sector and changes in energy sources that will reduce the sovereign's vulnerability to higher oil prices.
The stable outlook balances Moody's view that the planned fiscal reforms will set the government's elevated debt-to-GDP ratio on a gradually declining path in the next several years against the risk that weak growth and high unemployment cause delays or partial reversals in the government's fiscal consolidation strategy.
Moody's has also affirmed the B1 backed senior unsecured foreign currency rating and maintained the stable outlook on the Development and Investment Projects Fund of the Jordan Army.
In Moody's view, this is ultimately the obligation of the Government of Jordan which, acting through the Ministry of Finance (MoF), unconditionally and irrevocably ensures the due payment of this debt.
Jordan's country ceilings are unchanged. The foreign currency bond ceiling remains at Ba1/NP, the foreign currency deposit ceiling at B2, and the long-term local currency bond and deposit ceilings at Ba1.
