Minister says public finances show signs of recovery

AMMAN — Finance Minister Umayya Toukan on Sunday said positive economic indicators show that Jordan’s economy is on the right track of recovery. 

Briefing the Council of Ministers on the Kingdom’s financial status during the first half of 2014, Toukan cited growth rate uptrend, stability of inflation, increase of revenues and the rise of foreign currency reserves.

He said that the national economic reform programme enabled Jordan to overcome major challenges, noting that a study prepared by the ministry expects the budget deficit, with grants included, to drop to 3.3 per cent of the gross domestic product in 2016 from 8.3 per cent of the GDP in 2012.

Indicating that the GDP grew by 3.2 per cent in the first quarter of this year, Toukan said the economy is expected to expand by 3.5 per cent by the end of the year to reach 4.0 per cent and 4.5 per cent in 2015 and 2016 respectively. 

In regards to state finances, the minister said that during the first half of this year, domestic revenues amounted to JD2.99 billion compared to JD2.54 billion in the same period of last year, adding that revenues came in line of budget expectations. 

Domestic revenues are expected to continue their growth pace to reach JD5.8 billion this year, JD6.2 billion next year and JD6.8 billion in 2016, Toukan told the Cabinet, indicating that foreign grants in the January-June period dropped to JD291 million from JD433 million in the first half of 2013. 

Received foreign grants represent only 25.3 per cent of the JD1.1 billion in the financial assistance estimated in the budget, he added. 

Despite the positive performance of the state budget, the study shows that there are still several challenges to overcome, particularly accumulated losses of the state-owned electricity company (NEPCO), whose losses stood at JD3.4 billion by the end of 2013. 

NEPCO’s losses during the first five months of the year stood at JD482 million because the power tariffs were increased last year. 

Toukan also cited the debts of the government water sector, which reached JD442 million in the first five months of this year, compared to JD400 million by the end of 2013.