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Jordan’s National Debt Exceeds $40 Bn

Jordan’s National Debt Exceeds $40 Bn

Wednesday, 20 March, 2019 - 08:45
A general view of Amman city shows the turrets of the "Jordan Gate" project (File Photo: Reuters)
Amman- Asharq Al-Awsat
Jordan’s public debt rose 0.7 percent on a monthly basis in January reaching about $40.228 billion accounting for 94 percent of the gross domestic product (GDP), according to data released by the Ministry of Finance on Tuesday.

By the end of 2018, the public debt stood at $39.914 billion.

Figures showed that the net national debt increased 0.5 percent at the end of January reaching $38.1 billion, compared to $37.9 billion at the end of 2018, of which net domestic debt was $21 billion and foreign debt $17 billion.

Earlier, Jordanian Finance Minister Ezzeddine Kanakrieh said that Jordan's 94 percent national debt ratio is high in accordance with international financial standards and that all government plans are focused on reducing that ratio.

At the end of last year, the Ministry of Finance attributed the rise in net national debt to deficit funding by the National Electric Power Company and the Water Authority of Jordan.

Jordan's budget was $61 million compared to a deficit of $73.4 million during the same period in 2018. The budget for the current year predicts that the deficit will reach $910.2 million after enumerating foreign grants.

Earlier this month, a conference was held in London, where the International Monetary Fund (IMF) expressed its support for Jordan in face of external challenges.

Director of IMF Communications Department Gerry Rice said in a press conference that the Managing Director, Christine Lagarde, and staff continue to work with donors who met at “Grow Jordan” conference to help the country with critically-needed additional financial support, preferably in the form of grants.

“Jordan deserves world support to strengthen its resilience,” Rice said.

Speaking at a press conference, Rice reiterated that IMF does not impose programs on any of its members.

Jordan has come under very difficult conditions due to external shocks, so the IMF is supporting the government’s reform program that is designed to promote more inclusive growth, with focus on sustaining macroeconomic stability while advancing structural reforms in various areas to promote investment and employment, the Director indicated.

Rice explained that in order to end the rapid increase in public debt, the program emphasized the need to broaden the tax base as part of the revenue reform, while alleviating the impact on the most vulnerable.

The IMF has not made any specific recommendations on which products should be subject to higher taxes, however, it noted that prices of goods that are consumed by the poor must not be raised.

“So, I hope that helps to clarify what is, of course, a very difficult situation facing Jordan,” he concluded.

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