Российско-Иорданский Деловой Совет

2011 budget to further rely on local revenues

By Omar Obeidat

AMMAN –– Public revenues, including local and foreign assistance, in next year’s budget are estimated to grow by 6.9 per cent, despite a significant drop expected in foreign grants, according to a senior official.

Revealing the main aspects of the 2011 state budget, Finance Minister Mohammad Abu Hammour on Wednesday explained that local revenues are forecasted to reach JD4.88 billion, up by 10.6 per cent from the JD4.42 billion reestimated local revenues in 2010 budget, while foreign grants are expected to stand at JD300 million, down by 30.2 per cent from the reestimated JD430 million for this year.

The state budget of 2011 reflects the increase in reliance on local revenues, the minister said, remarking that domestic revenues will cover over 97 per cent of current spending, estimated at JD5.02 billion, compared with 90 per cent in 2010.

“The government will continue to enhance dependency on revenues generated locally as well as continue with efficient use of resources,” he told reporters yesterday, stating that economic indicators show that in 2012 and 2013 domestic revenues will cover current spending by over 102 per cent and 108 per cent, respectively.

Abu Hammour noted that next year’s budget, endorsed by the Cabinet Tuesday and referred immediately to the Parliament, seeks to restore a balance in public finance by reducing the deficit and bringing down public debt to safe levels. Next year’s budget will show for the first time the amount of money allocated to programmes that directly and indirectly affect women, revealing that allocations for this purpose will be around JD1.1 billion, or 18 per cent of public expenditures.

Pointing out that Jordan was ranked first by international organisations among Arab countries in terms of transparency in state budgets, Abu Hammour emphasised that the budget will continue controlling current spending by halting purchases of furniture, cars and freezing recruitment in public agencies, except for the health and education ministries.

Overall public revenues are expected to reach JD5.18 billion in 2011 compared with JD4.85 billion in 2010, while current spending is forecasted to increase to JD5.02 billion from JD4.88 billion this year and capital expenditure to rise to JD1.22 billion from the JD988 million in 2010, an increase of 23.7 per cent, according to the minister.

Overall expenditure is forecasted at JD6.24 billion in 2011 from the JD5.87 billion reestimated for this year, while deficit in next year’s budget is estimated at JD1.06 billion, or 5 per cent of the gross domestic product (GDP).

The government lowered the deficit in 2010 budget to JD1.02 billion, or 5.3 per cent of the GDP from the unprecedented record deficit in 2009 budget, which reached JD1.5 billion, 8.5 per cent of the GDP.

Asked whether there will be any tax hikes next year, Abu Hammour said that when the budget was prepared, the government did not consider imposing any rise in taxes.

jordantimes

Russian-Arabic Business Council

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