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Cabinet presents draft budget bill to House

By JT - Dec 05,2018 - Last updated at Dec 05,2018

AMMAN — The government on Tuesday presented to the Lower House the 2019 state budget draft law, estimating the budget deficit at JD646 million after foreign grants.

Reading a detailed report on next year’s state budget, Finance Minister Ezzeddine Kanakrieh said that the deficit in the 2019 state budget constitutes 2 per cent of the GDP, down from 2.7 in 2018. 

The minister also said that this ratio is expected to go down to 1.8 per cent and 1.3 per cent in 2020 and 2021 respectively, the Jordan News Agency, Petra, reported.

By excluding foreign grants, Kanakrieh said that the budget shortfall would be around 4 per cent of the GDP, down from the 5.8 per cent estimated for 2018, adding that this drop in deficit is expected to reach 3.5 per cent and 2.8 per cent in 2020 and 2021 respectively.

The minister added that despite the unstable regional conditions, indicators show that real economic growth this year is estimated to reach 2 per cent and 2.3 per cent in 2019. 

The deficit in the 2018 budget is expected to amount to 2.7 per cent of GDP by year end, compared with 2.6 per cent in 2017, while the total public debt is expected to total around JD28.4 billion by the end of 2018, constituting 94.5 per cent of GDP.

The draft law included allocations for a number of projects, such as the national service programme, projects to create employment opportunities for Jordanians, supporting public schools’ transportation, support for urban transport projects, promoting exports, tourism projects and the e-government.

According to the 2019 state budget draft law, GDP is expected to increase by 2.3 per cent, 2.5 per cent and 2.7 per cent in 2019, 2020 and 2021 respectively, the minister said.

The state budget statement submitted to the House estimated the volume of local revenues in 2019 to reach JD8.010 billion with an increase of 14.8 per cent from 2018, with Kanakrieh attributing the reason primarily to the rise in tax and non-tax revenues by 15.9 per cent and 12.9 per cent, respectively.

Tax revenues are estimated for the entirety of 2019 at JD5.273 billion, of which income tax revenues would constitute JD3.610 billion, customs revenues JD365 million, Property Sale Tax JD110 million, while non-tax revenues are estimated at JD2.737 billion, according to the statement.

Kanakrieh estimated foreign grants in 2019 to reach JD6 billion, compared with JD915 billion in 2018, with JD113 million coming from the GCC, JD71 million from pledges made at the Mecca summit, and JD416 million from the US and the EU.

The current expenditures are estimated to amount to JD8.013 billion, with a 13.3 per cent increase from 2018, the minister said, attributing the rise of JD257 million to routine annual increases in the salaries of civil servants and army and security personnel.

Kanakrieh added that capital spending in 2019 is estimated at JD1.242 billion with an increase of JD180 million from 2018, noting that growth in public expenditure is estimated at 13.4 per cent compared with 11.7 per cent last year. 

He added that the draft 2019 general budget law is in line with a set of measures the government adopted to contain the deficit and help the national economy cope with regional and international economic uncertainties.

The Lower House referred the general budget and the independent public institution budget drafts to its financial committee during a legislative session on Tuesday.

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