Iraq & Jordan: Economic Honeymoon
01 Feb, 2019
Economics & Finance
Jordan Plans Tax Hike To Cover Planned 2019 Deficit
01 Feb 2019
Jordan’s final 2019 budget indicates how the kingdom plans to navigate increasingly disruptive public hostility toward much-needed fiscal reforms.
The freshly released 2019 budget shows Jordan aiming to cut its budget deficit by 22% in real terms to JD 650mn ($910mn at the fixed rate of JD1=$1.41), down from $1.13bn in 2018 based on provisional numbers from the General Budget Department and Ministry of Finance (see table).
The government intends to do so without spending cuts: indeed, spending is slated to rise by 4% in real terms to $13bn for 2019. $11.3bn will be allocated toward current spending (mostly toward public sector wages and the military/security apparatus), a $500mn hike, whilst capital spending is slated to rise year-on-year by nearly 20%. Amman expects subsidies to remain flat along with ‘other’ spending which includes pensions and healthcare.
The budget should be taken with a pinch of salt: Jordan...
Jordan Public Finances ($Bn): Deficits, Deficits, Deficits