Tuesday, September 08, 2009

Economy: World Bank to prop up Jordan's economy

Reuters - The World Bank is to lend Jordan $300 million to prop up the budget this year as the financial crisis has put public finances under severe strain, bank officials said on Tuesday.

A World Bank mission completed a visit to the kingdom this week on terms of the development policy loan and was expected to begin formal negotiations to thrash out its details in mid-September.

The long-term loan would be presented to the bank's board for approval in October and the funds disbursed in one single tranche in the fourth quarter, sources within the bank said.

The loan's advantage was that it gave the authorities flexibility to use "the way they saw fit to help the kingdom cope with the economic slowdown", one source added.

Traditionally hundreds of millions of dollars of grants and aid from Western donors and Gulf Arab states have cushioned Jordan's economy and helped finance almost half of its budget deficit.

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