Economy performance 2016 figures ‘good news but misleading’ — experts

AMMAN — A recent official report of “sound financial indicators” in 2016 is "misleading" and being used to ensure that the 2017 draft state budget law is passed by Parliament, economic experts said on Sunday.

The Ministry of Finance, in a statement e-mailed to The Jordan Times this week, said that Jordan's public debt fell by JD300 million, reaching JD26.1 billion by the end of 2016, compared to a projected public debt of JD26.4 billion in the state budget.

The budget deficit in 2016 reached JD856 million, compared to a projected budget deficit of JD907 million, the ministry said, adding that the improvement in finances in 2016 came in spite of challenges, including security and political conditions in the region.

The ministry added that the percentage of public debt to gross domestic product was forecast at 94.9 per cent, based on the assumption that economic growth would reach 3.3 per cent by the end of 2016. 

In another statement Monday, the ministry said the budget deficit decreased to JD803.3 million by the end of November 2016, from JD1.025 billion in the same period the previous year, with foreign grants calculated. Without the grants, the deficit stood during the same period at around JD1.21 billion, down from JD1.447 billion the year before.

The positive indicators, however, provide no reason for the government to celebrate, according to experts.  

"These indicators mean nothing on the ground. They did not reflect positively on the lives of Jordanians or their ability to absorb the increase in prices, for example," Zayan Zawaneh, an economic expert and a former adviser to the IMF and the Central Bank of Jordan, told The Jordan Times on Sunday. 

Unemployment rate in Jordan averaged 12.81 per cent from 2007 until 2016, reaching an all-time high of 15.8 per cent in the third quarter of 2016 and a record low of 0.8 per cent in the second quarter of 2007, IMF figures show.

“There is a decline in exports and remittances… the improvements the government is talking about did not help increase the competitiveness of the industrial sectors, create jobs or improve the living standards of Jordanians,” the economist said.

“I believe the government only wants the 2017 state budget passed for now. In 2017, more decisions will be taken including increase in taxes and prices… I would label the situation as bad inspite of what the government is saying about 2016 performance,” he added.

Economist Hosam Ayesh said it was “too early for the government to brag about such achievements”.

“The results of the 4th quarter are not out yet… we have to wait,” he said Monday.

Although good news, these achievements are not “major”, the economist said.

“By talking about these achievements, the government wants to show it is on the right track to justify any upcoming measures and increases in taxes,” he added.