Jordan's Draft 2021 Budget Projects 2.5% Growth

Jordan's economy is expected to shrink by 3 percent this year. (AFP)
Jordan's economy is expected to shrink by 3 percent this year. (AFP)
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Jordan's Draft 2021 Budget Projects 2.5% Growth

Jordan's economy is expected to shrink by 3 percent this year. (AFP)
Jordan's economy is expected to shrink by 3 percent this year. (AFP)

Jordan's draft 2021 budget forecasts JOD9.9 billion (USD14 billion) in state expenditure and economic growth of 2.5 percent after the COVID-19 pandemic caused the worst contraction in decades, the finance minister said on Monday.

Mohamad Al Ississ told Reuters the cabinet had approved a budget that would accelerate IMF-backed reforms to help the kingdom restore fiscal prudence for a sustained recovery.

He said the budget would continue major fiscal reforms, including continuing an aggressive tax evasion campaign that has netted this year hundreds of millions of dinars for the country's strained state finances.

"Despite the unprecedented challenges, fiscal stability remains our priority," he said.

Ississ said the government would not resort to new taxes but a commitment to raise public sector pay that was postponed this year would push state spending, the bulk consumed by salaries and pensions.

Jordan's economy is expected to shrink by 3 percent this year, an improvement from an earlier 5.5 percent, the sharpest contraction in two decades. Before the pandemic struck, the IMF had estimated economic growth of 2 percent.

The government has given priority to cushioning the pandemic's impact on the poor by expanding a social safety net that has provided support to at least 2.5 million people, more than a third of the country's citizens, Ississ said.

It will help to ease the pain of the pandemic that has pushed unemployment to a record 23 percent, he added.

Although the kingdom has been more dependent than other regional economies on hard-hit sectors such as tourism and remittances, its commitment to an IMF-backed USD1.3 billion four-year program has helped to maintain external financing from major Western donors.

Jordan's commitment to IMF reforms and investor confidence in the country's improved outlook helped it to maintain stable sovereign ratings at a time when other emerging markets were being downgraded, the minister added.

Last week, Moody's affirmed Jordan's B1 credit rating, citing expenditure control and improved tax compliance. That followed a B+/B rating from Standard and Poor’s in September.



Trump Escalates Trade War with Sweeping Global Tariffs

US President Donald Trump holds a "Foreign Trade Barriers" document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., US, April 2, 2025. REUTERS/Carlos Barria
US President Donald Trump holds a "Foreign Trade Barriers" document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., US, April 2, 2025. REUTERS/Carlos Barria
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Trump Escalates Trade War with Sweeping Global Tariffs

US President Donald Trump holds a "Foreign Trade Barriers" document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., US, April 2, 2025. REUTERS/Carlos Barria
US President Donald Trump holds a "Foreign Trade Barriers" document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., US, April 2, 2025. REUTERS/Carlos Barria

US President Donald Trump intensified a global trade war Wednesday as he slapped sweeping tariffs on imports from allies and foes alike, sending markets into a tailspin and upending decades-long free trade norms.

The EU and China vowed retaliation against the levies, with Australia's leader saying the new tariffs were "not the act of a friend" and would hurt the close allies' relationship.

Shortly after Trump's proclamation, separate tariffs of 25 percent on all foreign-made cars and light trucks went into effect, with auto parts also due to be hit by May 3.

Holding up a chart of the sweeping measures in the White House Rose Garden, Trump unveiled particularly stinging tariffs on major trade partners China and the European Union on what he called "Liberation Day."

"This is one of the most important days, in my opinion, in American history," said Trump. "It's our declaration of economic independence."

The tariffs announcement triggered immediate anger around the world, with rival China warning they could "endanger" global economic development.

Stock markets looked set for major volatility Thursday, with Tokyo's Nikkei leading an Asian selloff, collapsing more than four percent, and Hanoi shares tanked more than five percent after Vietnam was targeted with tariffs of 46 percent.

US futures plummeted and safe haven gold hit a new record as investors took fright.

Trump reserved some of the heaviest blows for what he called "nations that treat us badly."

That included an additional 34 percent on goods from China -- bringing the new added tariff rate there to 54 percent.

Beijing swiftly vowed countermeasures and called for dialogue, warning the levies would "seriously harm" those involved.

The figure for the European Union was 20 percent, and 24 percent on Japan, whose trade minister called the tariffs "extremely regrettable."

For the rest, Trump said he would impose a "baseline" tariff of 10 percent, including another key ally, Britain.

The 78-year-old Republican brushed off fears of turmoil, insisting that the tariffs would restore the US economy to a lost "Golden Age."

"For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike," Trump said.

'Make America wealthy again'

A hand-picked audience of cabinet members, as well as workers in hard hats from industries including steel, oil and gas, whooped and cheered as Trump promised tariffs would "make America wealthy again."

Trump labeled Wednesday's tariffs "reciprocal" but many experts say his administration's estimates for levies placed on US imports by other countries are wildly exaggerated.

The US president had telegraphed the move for weeks, sparking fears of a recession at home as costs are passed on to US consumers, and a damaging trade war abroad.

US Treasury Secretary Scott Bessent warned against countermeasures, saying on Fox News: "If you retaliate, there will be escalation."

Some of the worst-hit trading partners were in Asia, including 49 percent for Cambodia, 46 percent for Vietnam and 44 percent for military-ruled Myanmar, recently hit by a devastating earthquake.

Russia was not affected because it is already facing sanctions over the Ukraine war "which preclude any meaningful trade," a White House official said.

Certain goods like copper, pharmaceuticals, semiconductors, lumber and gold will not be subject to the tariffs, according to the White House.

'Fight'

EU chief Ursula von der Leyen vowed Europe was "prepared to respond" to the tariffs, calling them a "major blow to the world economy."

Italian Prime Minister Giorgia Meloni, a close Trump ally, said the levies on the EU were "wrong" but pledged to seek a deal.

Britain escaped relatively lightly after a diplomatic offensive, but said it still wanted to "mitigate" the tariffs.

Canada and Mexico are not affected by the new levies as Trump has already punished them for what he says is their failure to stymie drug trafficking and illegal immigration.

Canadian Prime Minister Mark Carney vowed to "fight" the existing levies.

Trump's announcement is the culmination of a long love affair with tariffs, which he has seen for decades as a cure-all for America's trade imbalances and economic ills.

The 10 percent "baseline tariff" kicks in on Saturday, while the elevated rates for those the White House deemed "the worst offenders" will take effect on April 9.