Government presents House with trimmed JD8.09 billion budget bill

AMMAN — The government on Sunday presented to the Lower House the 2015 state budget draft law, estimating the budget deficit at JD688 million after foreign grants.

Reading a detailed report on next year's state budget, Minister of Finance Umayya Toukan told lawmakers that the projected deficit in the 2015 state budget is expected to stand at JD688 million compared with JD911 million recorded in 2014. The ratio of the deficit to the gross domestic product (GDP) would be around 2.5 per cent.

The minister also said that this ratio is expected to go down to 2.1 per cent and 1.4 per cent in 2016 and 2017 respectively.  

But by excluding foreign grants, Toukan said that the budget shortfall would be around JD1.8 billion in 2015, representing 6.5 per cent of the GDP, down from the JD2.8 billion budget deficit registered in 2014. 

As the size of next year’s budget is set to stand at JD8.09 billion, Toukan said that the current expenditures are estimated to amount to JD6.922 billion with a 2.9 per cent increase of JD193 million from 2014, attributing the rise to the routine annual increase in the salaries of civil servants and army and security personnel. 

Capital spending in 2015 is estimated at JD1.175 billion with an increase of JD59 million from 2014 of which JD510 million will be covered by the Gulf Cooperation Council’s (GCC) grant to Jordan, the minister said.

According to the state budget statement submitted to the House, the volume of public revenues in 2015 is expected to reach JD6.280 billion with an increase of 9 per cent from 2014 with Toukan attributing the reason primarily to the rise in tax and non-tax revenues by 4.9 per cent and 8 per cent, respectively.

Toukan estimated foreign grants in 2015 to reach JD1.128 billion in 2015, split into JD806 million from the GCC and JD322 million from the US and EU.

“As such, the revenues are estimated at JD7.408 billion in 2015 with an increase of 6.9 per cent from 2014,” Toukan said. 

The minister said that the deteriorating regional situation, the disruption in Egyptian gas supplies to Jordan and the ensuing losses of the state-owned National Electric Power Company have been the primary challenges to the state’s budget and the major factors behind the increase in public debt which, he said, is expected to total around JD21 billion by the end of 2014. 

“Despite these challenges and the resulting financial troubles, Standard and Poor’s has recently upgraded its long- and short-term foreign and local currency sovereign credit ratings for Jordan at BB-/B,” Toukan said. 

The minister added that despite the unstable regional and international conditions, mainly in Syria and Iraq, indicators in the first half of 2014 signalled a “modest growth” of 3 per cent compared to the same period in 2013, expecting 3.3 per cent economic growth in 2014.

He added that the draft 2015 state budget law is in continuation of the set of measures the government adopted to contain the deficit and help the national economy cope with regional and international economic uncertainties.

Improving the social security network through delivering subsidies to those who deserve, carrying out renewable energy projects, as well as curbing public spending and implementing the restructuring plan for independent public institutions are among the key features of the 2015 state budget.