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AMMAN: Jordan's state spending is forecast at 12.4 billion dinars ($17.5 billion) in its draft 2024 budget, Finance Minister Mohamad Al-Ississ said on Wednesday, supported by a strong showing in International Monetary Fund backed reforms.
Al-Ississ said growth was expected to be around 2.6 percent in 2024, the same level forecast for this year, as long as the war between Israel and Hamas did not lead to a wider conflict.
“Jordan can overcome this crisis as long as the regional situation does not see further escalation,” he told Reuters.
The 2024 draft budget, which was earlier approved during a cabinet session, forecasts total revenues next year at 10.3 billion dinars, a rise of 9 percent, with 724 million dinars in foreign grants, a slight drop from this year’s 752 million dinars.
Al-Ississ said the budget deficit was expected to fall to 2.1 of gross domestic product next year from 2.6 percent this year with improved state revenues as Jordan’s IMF-backed reforms yield results.
The budget comes weeks after an agreement earlier this month with the IMF on a new $1.2 billion four-year reform program.
Al-Ississ said the deal was a signal of confidence to investors and would help cushion the Jordanian economy from the adverse impact of the war in Gaza on tourism in the region.
The estimates took into account the impact on tourism, a pillar of the economy that has suffered due to the conflict.
Jordan’s commitment to IMF reforms and investor confidence in the outlook helped it to maintain stable sovereign ratings at a time when others being downgraded, Al-Ississ said.
Fitch earlier this month affirmed Jordan’s credit rating with a stable outlook, which Al-Ississ said was a testament to the Kingdom’s resilience despite the regional instability.
The government will not impose new taxes for a fourth year in a row but will seek other means including a continued crackdown on tax evasion to help boost revenues crucial to lowering public debt, Al-Ississ said.
Public debt was expected to drop to 88.3 percent of GDP from 88.7 percent, although the government had raised its annual debt servicing commitments on a total public debt of 33.5 billion dinars as a result of higher interest rates.
The budget raises allocations for capital investments by 11.8 percent to a record 1.7 billion dinars, with most of the funds channeled into an ambitious economic modernization program to spur growth, Al-Ississ said.