|23 January, 2020

Jordan's Senate endorses 2020 state budget draft law

The 2020 draft state budget law saw a rise in domestic revenues

AMMAN - The Senate on Wednesday endorsed the 2020 state budget bill and the draft law governing the budgets of independent public institutions.

On January 15, the Lower House passed the 2020 state budget draft law and the draft for the year’s budgets of independent public institutions after deliberations that dragged on for four days, over eight sessions.

Rapporteur of the Senate's Financial and Economic Committee Senator Issa Murad reviewed the panel's report and recommendations on the two bills, the Jordan News Agency, Petra, reported.

In its report, the panel recommended that the government not issue appendices for the budget in order to avoid disbursing money that exceed the amounts allocated under several budget items, which in previous years led to several companies accumulating debts.

Other suggestions highlighted the importance of following up on the "Jordan Export House", as similar models proved successful in many countries and contributed to increasing their exports.

The panel also called on the Energy Ministry to exert “serious efforts” to complete a roadmap to address the National Electric Power Company’s debts and impose a power tariff that meets the needs of consumers and the national economy.

Replying to senators' remarks, Finance Minister Mohamad Al-Ississ said that the government "completely agrees" with the committee's report on the importance of stable reform programmes that control government expenditures.

He added that the government is preparing a national programme for financial and economic reform.

Al-Ississ also referred to scheduled talks with the International Monetary Fund that aim at establishing a new programme to strengthen the national economy, realise financial sustainability, address shortcomings and reduce the general debt-to-GDP ratio.

In December, the government presented the 2020 draft state budget law to the Lower House, with an estimated deficit of JD1.247 billion following foreign grants.

At the time, Al-Ississ said that 2020 expenditures are expected to reach JD8.383 billion, an increase of JD414 million from 2019.

The minister also noted that 65 per cent of the current expenditures will go towards salaries for serving and retired civil and military employees.

Al-Ississ added that the value of capital spending in 2020 is estimated at JD1.425 billion, marking an "unprecedented" increase of 33 per cent.

The 2020 draft state budget law saw a rise in domestic revenues to reach JD7.754 billion, registering an increase of 10.4 per cent from the JD7.021 billion reestimated in 2019.

Foreign grants in 2020 are expected remain the same as the reestimated value in 2019 at JD807 million.

The deficit in the 2020 budget is estimated to reach JD1.247 billion after factoring in grants, up from the reestimated value of JD1.215 billion for 2019.

Before grants, 2020's deficit was estimated at JD2.054 billion (6.4 per cent of the GDP) compared with 2019's reestimated deficit of JD2.018 billion, which accounted for 6.5 per cent of the GDP.

According to the draft law, tax revenues are expected to increase by JD853 million to JD5.651 billion compared with the reestimated JD4.798 billion for 2019, while non-tax revenues are expected to see a 5.4-per cent drop to JD2.103 billion in 2020, down from the reestimated JD2.223 billion for 2019.

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