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Jordan Cabinet Approves USD13 Billion Budget for 2019

Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed
Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed
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Jordan Cabinet Approves USD13 Billion Budget for 2019

Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed
Image used for illustrative purpose. A general view of Amman city shows the turrets of the "Jordan Gate" project. REUTERS/Muhammad Hamed

Jordan’s cabinet approved a JOD9.25 billion (USD13 billion) budget for 2019 as part of a reform of public finances to ease the country’s record debt burden and spur economic growth hit by conflict in the region.

The budget, which will be sent to parliament for approval, envisaged a deficit equal to 2 percent of Jordan’s gross domestic product.

The main features of the draft law indicate that the general revenues were estimated at USD12.14 billion with USD11.29 billion as domestic revenues and USD850 million dinars as foreign grants.

Spending of 2019 was estimated at USD13.04 billion, a rise of USD616 million compared to the current year.

The current expenditure increase was 3.3 percent compared to 2018 in what was attributed to normal growth in expenditure related to the annual increase in the salaries of public employees, the increase in allocations of the National Aid Fund, and an upgrade in the share of the healthcare system.

The deficit in the 2019 budget amounted to USD910 million after grants, constituting 2 percent of GDP, down from USD1.15 billion in the re-estimated value for 2018 at 2.7 percent of GDP.

The draft law estimated an increase in financial solvency indicators for the coming year’s budget coverage for public expenditures from 80.1 percent re-estimated value in 2018 to 86.5 percent in 2019. The draft budget law saw a rise in domestic revenues to cover 100 percent of current expenditure, up from 90.8 percent re-estimated value this year.

Jordan's public finances are under strain and the government is struggling to curb a public debt of more than USD37 billion, equivalent to 96 percent of GDP.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.