By Suleiman Al-Khalidi

AMMAN, Reuters – Mohamad al Ississ (Jordan’s Finance Minister) said Sunday that the 2022 draft budget estimates 10.6 billion dinars ($15 Billion) in state expenditures. This paves way for a return to growth of 2.7% in the wake of the impacts from the coronavirus pandemic.

Al Ississ stated at a press briefing that Jordan also had last week completed the third review of its four-year program of reforms backed by International Monetary Fund. These reforms were meant to restore fiscal prudence in order for sustained recovery.

Al Ississ claimed that the government has increased its local revenues without raising taxes last year through an unusual campaign to fight tax evasion, and a massive restructuring of the tax- and customs management that eliminated exemptions.

The total revenue for next year was 8.9 billion dinars. 848 million were foreign grants.

Jordan’s economy was particularly hard hit last year by the shutdowns aimed at containing the virus, with unemployment at a record 24% amid the worst contraction in decades.

Al Ississ stated that inflation was expected to increase to 2.5 percent next year, compared to a projection of 1.6%.

The majority of state spending goes to salaries and pensions, a country with the largest government expenditure relative to its economy’s size (45 billion dollars).

To spur growth and to improve infrastructure, the government increased capital spending by 43% to 1.5 billion dinars. This is a significant increase from last year, according to finance minister.

Jordan’s commitment to IMF reforms and investor confidence in the country’s improved outlook helped it to maintain stable sovereign ratings at a time when other emerging markets were being downgraded, Al Ississ said.

Al Ississ stated that debt servicing of 29.4 Billion Dinars worth public debt will drop in the next year. There is a push for preferential loans, grants and reorientation away from higher-priced commercial lending.

($1-0.709 dinars)