2017 will not be an easy year — minister

AMMAN — Finance Minister Omar Malhas on Friday said that the government, in cooperation with the International Monetary Fund (IMF), has started applying a structural financial reform programme.

The programme requires JD450 million as revenues to cover the additional spending in the general budget, the Jordan News Agency, Petra, reported.

In an interview on Jordan Television's "60 Minutes" that also featured Lower House Finance Committee Chairman Ahmad Safadi, Malhas said the government has not yet found a mechanism to achieve the required revenue increase and it is still under discussion.

The draft budget law forecast GDP to grow by 3.3 per cent next year, which means increasing the government's revenues by the same growth ratio, the minister said.

He added that 2017 will not be an easy year as long as external pressure continues, adding: "We should not forget the difficult regional circumstances that started with the Arab Spring, then the Syrian crisis and lately the Iraqi border closure." 

As for poverty and unemployment, Malhas said that the bulk of of the government's efforts is focused on the two issues, noting that some JD650 million was allocated for social safety net.

The government also, in cooperation with the Central Bank of Jordan and the Employment Fund, will make JD400 million available as loans to small, medium and developing enterprises.

With regard to increasing the salaries of public sector employees, Malhas said that it is not possible under such a situation as increasing every salary by only one dinar costs the budget JD12 million. 

The minister noted that 80 per cent of current spending covers monthly salaries, pensions, debt interests, and outstanding financial dues.

Malhas expected domestic revenues to cover 90 per cent of current spending in 2017, 96 per cent in 2018 and to square in 2019.

For his part, Safadi said that growth rate is expected to be at 2.4 per cent, increasing revenues to JD500 million, which is a slight increase worth JD110 million compared to 2016.

Answering a question on the reasons for the public debt increase, Safadi blamed the security requirements dictated by regional unrest and the partial stoppage in land transport because of border closures.

The public debt has increased from JD13 billion in the past few years to JD26 billion currently, according to Petra.