Gov’t unveils ‘disciplined, growth-oriented’ 2016 budget bill

AMMAN – The government on Sunday unveiled what it described as a disciplined and growth-oriented budget bill for 2016 with an estimated spending of JD8.496 billion and a projected deficit of 3.1 per cent of the gross domestic product (GDP). 

Finance Minister Umayya Toukan said the growth projection for next year is put at 3.7 percent, while inflation is estimated at 3.1 per cent in the 2016 draft general budget law, endorsed by the Cabinet Sunday and referred to Parliament. 

The government's economic growth projection for next year was also forecast by the International Monetary Fund and the World Bank. 

The Kingdom's exports are predicted to expand by 5 per cent next year compared to an 8 per cent decline expected by the end of this year, and imports are expected to grow by 2.5 per cent, Toukan added. 

The finance minister said domestic revenues are expected to grow by nearly 11 per cent to JD6.775 billion in 2016, from JD6.095 billion re-estimated for 2015, while grants are projected to reach JD814 million, up from the JD731 million re-estimated for this year. 

He said the grants included in the spending bill were committed by donors, noting that the $1.25 billion grant Qatar was supposed to offer to Jordan as part of the Gulf Cooperation Council pledge in 2011 was not included in next year's draft budget law. 

With overall revenues, domestic and grants estimated to be around JD7.589 billion, a JD907 million deficit is forecast as the government plans to spend JD8.496 billion — JD1.311 billion in capital expenditure and JD7.185 billion in current expenditure. 

Noting that capital spending is projected to go up by JD215 million over the JD1.096 billion re-estimated for 2015, Minister of State for Media Affairs and Communications and Government Spokesperson Mohammad Momani said next year’s budget is growth-oriented and aims to lift economic growth rates, describing the draft law as disciplined because of government measures to control spending and increase revenues. 

“The Kingdom’s economic growth was hit by regional conditions as turmoil has taken a toll on Jordan’s cargo movement, trade and security spending,” he told reporters during a press conference at the Prime Ministry following the Cabinet’s approval of the draft budget  law. 

The direct cost of hosting around 1.5 million Syrians on the Treasury is estimated at hundreds of millions of dinars, he added. 

Momani said the budget was planned on the assumption that oil prices will be around $60 a barrel, explaining that although low oil prices had a positive impact on Jordan’s economy, the government’s revenues from fuel products dropped by JD150 million this year. 

The value of interest on loans the government has to pay next year was put at JD920 million, Toukan said at the press conference, which General Budget Department Director Mohammad Hazaimeh and Finance Ministry Secretary General Ezeddin Kanakriyeh also attended. 

The public debt is expected to reach JD22.489 billion by the end of this year, representing 83.6 per cent of the GDP, according to the finance minister, while in 2016 its ratio to the GDP is projected to go down to 83 per cent despite its anticipated growth to JD23.9 billion. 

The Kingdom’s GDP is expected to reach JD28.796 billion in 2016, up from JD26.913 billion expected by the end of 2015.