Professor Raad Tal, who heads the Department of Economics at the University of Jordan, said that budget expectations were based on the assumption of achieving economic growth, which would be influenced by the unfolding events in the region. This includes factors such as investment flows, the repercussions on tourism income, and the decline in overall economic demand. He added that achieving economic growth at the projected rate would pose a considerable challenge.
Tal voiced apprehensions about a potential decline in the revenues of the Kingdom in the upcoming year, leading to an augmentation of the deficit (the variance between revenues and expenditures). He highlighted that the government has augmented its capital spending allocations in absolute figures, with a significant portion of these funds earmarked for concluding projects currently in progress.
He stressed the importance of understanding the signals related to “political, economic, and security” matters that emerged from the meeting between His M
ajesty King Abdullah II and the government concerning the National Water Carrier Project. This necessitates a shift in financial policy management, moving from a reactive approach to one focused on scenarios and expectations for future stages.
The proposed budget legislation delineated the anticipated current expenses for the upcoming year. Allocations for supporting strategic food commodities were increased to JD288.5 million, surpassing the re-estimated JD257 million allocated for the current year.
As per the proposed legislation, capital spending rose by approximately 12 percent compared to its 2023 level, reaching a historical high of JD1.729 billion. Within this, allocations for projects aligned with the Economic Modernization Vision and the Public Sector Modernization Roadmap comprised 20.2 percent of the total expenditure. Additionally, municipal development and decentralization initiatives made up 18 percent, while military and security projects constituted 16.9 percent. The remaining projects accou
nted for about 45 percent of the overall capital expenditures.
Thus, the proposed budget for 2024 has achieved a consistent reduction in the primary deficit for the fourth consecutive year. The government aims to decrease the primary deficit to JD812 million, constituting 2.1 percent of the Gross Domestic Product (GDP), as opposed to 2.6 percent in 2023. Furthermore, the total public debt is expected to decline, reaching 88.3 percent of the GDP, excluding the debts of the Social Security Investment Fund. This percentage is projected to gradually decrease in the subsequent years, reaching 85.7 percent by 2026.
By fostering economic growth and augmenting revenues, Issis highlighted that this budget marks the first in several years to “increase capital spending by 12 percent.” The government also emphasizes collaboration with both the public and private sectors to enhance the effectiveness of government expenditures and enhance infrastructure services. Additionally, the budget includes provisions for elevating
allocations to the Social Safety Net and the National Aid Fund for the underprivileged.
Issis asserts that the economy will sustain moderate inflation rates, recognized as among the lowest globally. This stance contributes to fortifying financial and monetary stability, safeguarding the purchasing power of citizens.
Source: Jordan News Agency