Jor­dan cabi­net ap­proves $13 bil­lion bud­get for 2019

The Gulf Today - Business - - FRONT PAGE -

AM­MAN: Jor­dan’s cabi­net ap­proved on Wed­nes­day a 9.25 bil­lion di­nar ($13 bil­lion) bud­get for 2019 as part of a re­form of pub­lic fi­nances to ease the coun­try’s record debt bur­den and spur eco­nomic growth hit by con­flict in the re­gion, of­fi­cials said.

Finance Min­is­ter Izzedin Kanakrieh said the bud­get, which will be sent to par­lia­ment for approval, en­vis­aged a deficit equal to 2 per cent of Jor­dan’s gross do­mes­tic product.

The cabi­net ex­pects state rev­enues of 8.6 bil­lion di­nars next year, boosted by Imf-backed tax in­creases to help the king­dom re­store fis­cal pru­dence for a sus­tained recovery, the of­fi­cials added.

Es­ti­mates in the pro­jected bud­get in­clude around 600 mil­lion di­nars in for­eign aid. Direct cash sup­port by ma­jor donors tra­di­tion­ally cov­ers chronic bud­get short­falls.

Kanakrieh told the pro-govern­ment al Mam­laka tele­vi­sion sta­tion that a tax bill that par­lia­ment ap­proved ear­lier this month will help the govern­ment to cut down on ram­pant tax eva­sion.

Crit­ics say the tax bill will dam­pen do­mes­tic con­sump­tion and deal a blow to in­vestor sen­ti­ment, al­ready hit by po­lit­i­cal un­cer­tainty over risks of a new wave of protests.

An ear­lier ver­sion of the bill trig­gered some of the largest protests in years last sum­mer that brought down the pre­vi­ous govern­ment.

Prime Min­is­ter Omar al Raz­zaz has pushed the new tax bill, say­ing its pas­sage was needed to get a clean bill of health from the IMF and lower the cost of ser­vic­ing over $1.4 bil­lion in for­eign debt due next year.

Jor­dan’s econ­omy has been badly hit by con­flict in neigh­bour­ing Syria and Iraq, both tra­di­tion­ally ma­jor trad­ing part­ners.

Its pub­lic fi­nances are un­der strain and the govern­ment is strug­gling to curb a pub­lic debt of over $37 bil­lion, equiv­a­lent to 96 per cent of GDP.

An ex­pan­sion­ist fis­cal pol­icy in pre­vi­ous years char­ac­terised by job cre­ation in the pub­lic sec­tor had pushed the debt to record lev­els.

Over the last two years the king­dom has raised gen­eral sales taxes and cut sub­si­dies un­der an IMF aus­ter­ity pro­gramme aimed at low­er­ing pub­lic debt to 77 per cent of GDP by 2021.

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