Jordan plans to cut 2013 budget deficit
Amman, January 5, 2013
Jordan aims to cut its budget deficit by about a third this year to curb the impact of soaring fuel import costs and high social spending linked to the wave of Arab uprisings.
Finance ministry sources said the draft 2013 budget aimed to reduce the 2013 deficit to 5.4 percent of gross domestic product (GDP) from 7.9 per cent last year.
Jordan suffered widespread civil unrest after the country moved in November to end fuel subsidies. Protests turned violent in impoverished rural areas where rioters for several days torched government buildings and looted scores of banks.
The International Monetary Fund (IMF) last month applauded the decision to abolish fuel subsidies, part of a fiscal consolidation plan aimed at reducing the budget deficit and securing a $2-billion standby loan from the IMF.
The ministry sources said the draft 2013 budget has been set at 7.45 billion dinars ($10.5 bln) and emphasises fiscal prudence to reduce the deficit to JD1.31 billion ($1.83 billion) from 1.76 billion dinars forecast for 2012.
The latest 2013 estimate of state expenditure includes 850 million dinars of grants from donor countries, which are traditionally used to cover some of the budget shortfalls.
Arab uprisings in the region have hit Jordan's domestic demand and foreign cash flows, including remittances from expatriates in the Gulf.
But the biggest damage to the economy came after the revolution in Egypt disrupted cheap gas imports, forcing the kingdom to switch to much more expensive fuel oil to cover its electricity needs.
The authorities say it is crucial to push for budgetary discipline under an IMF-guided fiscal consolidation plan.
The sources said 2013 economic growth was expected to be around 3 per cent, the same as forecast for 2012.
The 2013 budget allocates 6.21 billion dinars in current state expenditure, mainly public sector pay, and puts aside 1.24 billion dinars for capital spending, the sources said.
Independent economists warn about the long-term sustainability of high public spending to maintain a bloated civil service that includes large military and security services.-Reuters
More INTERNATIONAL NEWS Stories
- Libya orders military force to 'liberate' ports
- Big bananas: Chiquita, Fyffes merge
- Radar sweeps, dozens of aircraft, but no sign of plane
- N Korea tanker loads oil at Libya rebel port
- Gold drops as US growth optimism weighs
- Merkel raps Putin; Russia tightens grip on Crimea
- World 'at sea' over missing Malaysian jetliner
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on
- $5bn poll spend to boost India economy
- Libya authorises use of force against Korean tanker
- Ukraine PM says he will go to US to discuss crisis
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing
- No sign of missing plane; Malaysia probes false passports
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'
- Obama orders sanctions over Russian moves
- Crimea parliament votes to join Russia
- Arab League to be revamped
- 'Upskirting' is legal: Massachusetts court
- Singapore probes 'unnatural' death of bitcoin trader
- Onus on world powers for Syria war crimes: UN
- US, Russia set for talks on Ukraine crisis