Jordan's Finance Minister Mohamad Al Ississ said on Sunday that the draft 2022 budget forecasts 10.6 billion dinars ($15 billion) in state expenditure and paves the way for a rebound in growth to 2.7 percent after the impact of the coronavirus pandemic.
Al Ississ told a media briefing that Jordan had also last week successfully concluded the third review of a four-year program of International Monetary Fund (IMF) backed reforms to help it restore fiscal prudence for a sustained recovery.
He said that the government had increased its local revenues last year without raising taxes through a rare campaign to combat tax evasion and by a major restructuring of the tax and customs administration that ended exemptions.
It foresaw total revenues next year at 8.9 billion dinars, with 848 million in foreign grants.
Jordan’s economy was particularly hard hit last year by the shutdowns aimed at containing the virus, with unemployment at a record 24 percent amid the worst contraction in decades.
Inflation, however, is expected to rise to 2.5 percent next year from a projected 1.6 percent this year, Al Ississ said.
Most state expenditure goes on salaries and pensions in a country that has among the highest government spending relative to the size of its $45 billion economy.
The government has raised capital spending to 1.5 billion dinars, a 43 percent rise from the previous year to help spur growth and improve infrastructure to help attract more investment, the finance minister said.
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, Al Ississ said.
He added that debt servicing on 29.4 billion dinars of public debt would drop next year with a push to expand preferential loans and grants away from more expensive commercial lending.