Rating agency Fitch assigned Jordan's long-term foreign-currency issuer default rating BB- with a stable outlook citing the country's track record of fiscal and economic reforms. "Jordan has built up a track record of reforms that have substantially reduced the budget deficit and stabilised government debt to gross domestic product (GDP) after being hit by multiple shocks and a slowdown in economic growth since 2011," Fitch said. The country's rating, three notches below investment grade, was driven by availability of domestic and external funding linked to the liquid bank sector, a growing public pension fund and funds from external investors, Fitch said. The sovereign's rating is constrained by high government debt, weak growth, large external financing needs and geopolitical risks. Rising unemployment, escalating geopolitical friction and domestic opposition to IMF sponsored austerity programme measures that include fiscal consolidation are some of the immediate challenges that Jordan is facing. The kingdom is financially burdened by hosting 1.3 million Syrian refugees, spending $2.5 billion a year to support them. With no natural resources, Jordan imports more than 90 per cent of its energy needs and has historically financed its deficits through grants and soft loans. Jordan could see a positive rating action if it makes progress in fiscal consolidation that leads to sustained lower government debt, higher economic growth and reduced current account deficit, Fitch said. Factors that may lead to a negative rating include rising external debt, deteriorating government debt and worsening domestic stability or geopolitical shocks that hit the economy, it said. Fitch projects Jordan will reduce government debt gradually over the medium term, assuming it maintains fiscal discipline. The agency forecasts that the central government budget deficit will narrow to 2.2 per cent of GDP this year, from 2.4 per cent in 2018, helped by a contentious income tax law that came into effect in January. The forecast is constrained by further increases in interest payments. Fitch estimates an "almost balanced" budget in 2019. Economic growth will improve but remain moderate at 2.13 per cent in 2019-2020, from 1.9 per cent last year, according to Fitch projections. Growth is limited by fiscal constraints and a slight improvement in trading and investment conditions within the region, it said. Revenues from tourism have increased 13 per cent in 2018 and Fitch expects tourism to continue growing in 2019. A high unemployment rate of 19.1 per cent in the first quarter of this year, with youth unemployment far exceeding that, presents an ongoing risk of social unrest, it said. "Over the medium term there may be calls for further political and constitutional reforms that could disrupt economic policymaking," Fitch said. Jordan's government is navigating a debt crisis and continuing austerity measures to comply with a $723 million (Dh2.6bn) IMF loan a year after nationwide protests over taxes brought down the previous government.