Gov’t expects increased revenues in 2016

AMMAN – The government on Sunday submitted to the Lower House the draft 2016 general budget law in addition to the bill governing the budget of independent government units.

Reading the draft law to the House, Minister of Finance Omar Malhas put public spending for 2016 at JD8.496 billion and a projected deficit of 3.1 per cent of the gross domestic product.

Malhas said the growth projection for next year is put at 3.7 per cent, while inflation is estimated at 3.1 per cent in the 2016 draft general budget law.

In the draft law, the Kingdom’s exports are predicted to expand by 5 per cent next year compared to an 8 per cent decline expected by the end of this year, and imports are expected to grow by 2.5 per cent.

The finance minister said domestic revenues are expected to grow by nearly 11 per cent to JD6.775 billion in 2016, from JD6.095 billion re-estimated for 2015, while grants are projected to reach JD814 million, up from the JD731 million re-estimated for this year. With overall revenues, domestic income and grants estimated to be around JD7.589 billion, a JD907 million deficit is forecast as the government plans to spend JD8.496 billion — JD1.311 billion in capital expenditure and JD7.185 billion in current expenditure.

The minister added that the 2016 state budget bill was based on a set of measures the government has already embarked on, including the restructuring of public agencies, the implementation of renewable energy projects, enhancing the move towards a self-sufficient economy, diversifying financing resources and enhancing the investment environment.

Malhas said that the 2016 state budget was built on the assumption that Jordan will receive all foreign grants expected to reach JD814 million – JD460 million from Saudi Arabia, the UAE and Kuwait under the GCC fund to Jordan and JD354 million from the US and EU. 

He also said the 2016 general budget bill and governing the budget of government units were based on a set of assumptions and financial  measures such as refraining from issuing any budget supplement unless there was a state of urgency, continuing controlling appointments at public institutions and subsidising bread.

Malhas added that the government will continue its austerity and belt-tightening measures as part of a mechanism already in place to reduce current and operational expenditures.

On the estimates in the 2016 law governing the budget of state agencies, Malhas put the total revenues in 2016 at around JD1.5 billion, up from around JD1.2 billion re-estimated in 2015.

According to the minister, spending at these agencies is expected to reach JD1,905 million in 2016 with an increase of JD184 million from 2015, when the figure reached JD1,721 million. The official attributed the rise to the debt interests owed by the National Electric Power Company and Water Authority, set at JD21 million and JD25 million respectively.