AMMAN (Reuters) – Jordanian Finance Minister Mohamad Al Ississ said on Sunday that the 2022 draft budget provided for 10.6 billion dinars ($ 15 billion) in state spending and paved the way for a rebound growth to 2.7% after the impact of the coronavirus pandemic.
Al Ississ told a press conference that Jordan also successfully concluded last week the third review of a four-year reform program backed by the International Monetary Fund (IMF) to help it restore the fiscal prudence for a sustained recovery.
Al Ississ said the government increased local revenues last year without raising taxes thanks to a rare anti-tax evasion campaign and a major restructuring of the tax and customs administration that ended exemptions .
He forecast total revenue next year at 8.9 billion dinars, including 848 million from foreign subsidies.
Jordan’s economy was hit particularly hard last year by closures aimed at containing the virus, with a record unemployment rate of 24% amid the worst contraction in decades.
Inflation is expected to hit 2.5% next year, however, from 1.6% this year, Al Ississ said.
Most government spending goes on wages and pensions in a country with some of the highest public spending relative to the size of its $ 45 billion economy.
The government increased capital spending to 1.5 billion dinars, an increase of 43 percent from the previous year, to boost growth and improve infrastructure to attract more investment, the government said. Minister of Finances.
Jordan’s commitment to IMF reforms and investor confidence in improving the country’s outlook have helped it maintain stable sovereign ratings at a time when other emerging markets were downgraded, Al Ississ said. .
Al Ississ said debt service on 29.4 billion dinars of public debt would decline next year with pressure to extend preferential loans and grants away from more expensive commercial loans.
(Reporting by Suleiman Al-Khalidi, editing by Louise Heavens and Alexander Smith)
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