Senate endorses draft budget for 2023

AMMAN — The Senate on Tuesday endorsed the 2023 draft state budget as referred from the Lower House.

Senators also approved 64 recommendations referred from the Senate Finance and Economy Committee after listening to the government's reply to their remarks, delivered by Finance Minister Mohamad Al-Ississ, the Jordan News Agency, Petra, reported.

A total of eight senators spoke during the budget deliberation session, chaired by Senate President Faisal Fayez, where they called for reducing expenditures, addressing general debt, curbing poverty and unemployment, preparing a clear programme for stimulating economic growth through revised tax burdens, developing the investment environment, stimulating exports and financing small enterprises.

Senators also expressed appreciation of Gulf countries’ support for the Jordanian economy.

At the end of the session, Fayez said that the Upper House will always implement His Majesty King Abdullah's directives and pursue cooperation with the government and various national institutions in addressing challenges and achieving comprehensive reform.

He said that financial and economic reforms are required to overcome the existing budget deficit, stressing the need to prepare clear and viable economic policies with fixed timetables in order to avail of Jordan's advantages in various sectors.

Delivering the government's reply, Al-Ississ said that the government, for the third consecutive year, is committed not to exceed the expenditures proposed in the budget, Petra reported.

Outstanding debts in the budget were arrears imposed on the government in the healthcare and energy sectors, the minister said, noting that and many of the debts had been addressed. Al-Ississ explained that decades-long structural imbalances, which continued to generate arrears, are an issue the government is committed to addressing.

In response to the remarks made by the senators concerning independent government units, Al-Isssiss said that the government, in compliance with the Constitutional amendment to Article 112, incorporated the government units' budgets into the General Budget Law.

The minister added that this amendment will not affect the independence of companies and government units, as no amendment has been made governing their operation.

The Central Bank of Jordan (CBJ) has been excluded from the budgets of government units out of the government’s aspiration to increase the bank’s independence, as independent monetary policy has been the main pillar of Jordan’s monetary and economic stability for decades, Al-Ississ said.

The CBJ’s foreign currency reserves reached a "very reassuring level", the finance minister added, noting that the reserves had reached $17.2 billion at the end of January 2023, covering approximately seven and a half months of the Kingdom's imports of goods and services. 

The minister added that the net foreign direct investment inflows grew by 94 per cent, to reach JD629 million, in the first three quarters of 2022, compared with the corresponding period in 2021.

In December, the Cabinet endorsed the general budget bill for 2023, valued at JD11.432 billion, an 8.3 per cent increase from the 2022 budget.

The finance minister noted that the primary budget deficit is projected to decrease from 3.4 per cent to 2.9 per cent in 2023.

Public revenue, which includes domestic revenue and external grants, will reach JD9.6 billion in 2023, Al-Ississ added.

Moreover, domestic revenue is expected to increase by 10.4 per cent from 2022, reaching JD8.8 billion. Tax revenue will likewise see an increase of around 11.7 per cent, reaching JD6.6 billion, due to the government’s efforts in combating tax and customs evasion. This will contribute to a notable public debt reduction in 2023, he said.

This is the government’s third consecutive general budget without any increases in taxes and fees, or the imposition of new ones, according to Al-Ississ.

External grants are expected to reach JD808 million in 2023, increasing by 0.8 per cent from the previous year, he added.

Moreover, the “real growth” rate for 2023 is projected to reach 2.7 per cent, he said.

The inflation rate is also expected to remain at 3.8 per cent in 2023, he added, noting that this is “very good” compared with inflation rates in other countries around the world, which have skyrocketed.