Jordan cabinet approves $13bn budget for 2019

(AFP)
Updated 29 November 2018
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Jordan cabinet approves $13bn budget for 2019

  • Finance Minister Izzedin Kanakrieh said the budget, which will be sent to parliament for approval, envisaged a deficit equal to 2 percent of Jordan’s gross domestic product
  • An earlier version of the bill triggered some of the largest protests in years last summer that brought down the previous government

AMMAN: Jordan’s cabinet approved on Wednesday a 9.25 billion dinar ($13 billion) budget for 2019 as part of a reform of public finances to ease the country’s record debt burden and spur economic growth hit by conflict in the region, officials said.
Finance Minister Izzedin Kanakrieh said the budget, which will be sent to parliament for approval, envisaged a deficit equal to 2 percent of Jordan’s gross domestic product.
The cabinet expects state revenues of 8.6 billion dinars next year, boosted by IMF-backed tax increases to help the kingdom restore fiscal prudence for a sustained recovery, the officials added.
Estimates in the projected budget include around 600 million dinars in foreign aid. Direct cash support by major donors traditionally covers chronic budget shortfalls.
Kanakrieh told the pro-government al Mamlaka television station that a tax bill that parliament approved earlier this month will help the government to cut down on rampant tax evasion.
Critics say the tax bill will dampen domestic consumption and deal a blow to investor sentiment, already hit by political uncertainty over risks of a new wave of protests.
An earlier version of the bill triggered some of the largest protests in years last summer that brought down the previous government.
Prime Minister Omar al Razzaz has pushed the new tax bill, saying its passage was needed to get a clean bill of health from the IMF and lower the cost of servicing over $1.4 billion in foreign debt due next year.
Jordan’s economy has been badly hit by conflict in neighboring Syria and Iraq, both traditionally major trading partners.
Its public finances are under strain and the government is struggling to curb a public debt of over $37 billion, equivalent to 96 percent of GDP.
An expansionist fiscal policy in previous years characterised by job creation in the public sector had pushed the debt to record levels.
Over the last two years the kingdom has raised general sales taxes and cut subsidies under an IMF austerity program aimed at lowering public debt to 77 percent of GDP by 2021.
Jordan cannot expect high levels of aid that have underpinned the stability of the kingdom to be maintained indefinitely, Western donors say.
But the austerity steps have hurt the economy, with growth expected to continue to stagnate at around 2 percent next year. That is almost half the levels seen over the last decade during a boom period fed by high aid levels and capital inflows and investments.
While the government has focused on fiscal reforms, it has refrained from public wage reforms that remain a red line, donors say.
Economists say maintaining a large bureaucracy which consumes the bulk of state expenditure is increasingly untenable.


Iran falls to sixth biggest oil supplier to India as sanctions bite

Updated 14 December 2018
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Iran falls to sixth biggest oil supplier to India as sanctions bite

  • Tehran dropped two places to become only the sixth biggest supplier after New Delhi cut purchases due to the impact of US sanctions
  • The UAE, which was the sixth biggest oil seller to India in October, became the third-top seller to India in November

NEW DELHI: India’s monthly oil imports from Iran plunged to their lowest in a year in November with Tehran dropping two places to become only the sixth biggest supplier after New Delhi cut purchases due to the impact of US sanctions, according to ship tracking data and industry sources.
Last month, the US introduced tough sanctions aimed at crippling Iran’s oil revenue-dependent economy. Washington did, though, give a six-month waiver from sanctions to eight nations, including India, and allowed them to import some Iranian oil.
India is restricted to buying 1.25 million tons per month, or about 300,000 barrels per day (bpd).
In November, India imported about 276,000 bpd of Iranian oil, a decline of about 41 percent from October and about 4 percent more than the year-ago month, ship tracking data obtained from shipping and trade sources showed.
After abandoning the 2015 Iran nuclear deal, US President Donald Trump is trying to force Tehran to quash not only its nuclear ambitions and its ballistic missile program but its support for militant proxies in Syria, Yemen, Lebanon and other parts of the Middle East.
India’s imports from Iran in November, included some parcels that were loaded in October. In November, Iraq and Saudi Arabia continued to be the top-two oil sellers to India.
The UAE, which was the sixth biggest oil seller to India in October, became the third-top seller to India in November, knocking down Venezuela to fourth position.