AMMAN, 13 December 2006 — The Jordanian government yesterday introduced to the lower house of Parliament a deficit budget envisaging total spending of 4.334 billion dinars ($6.12 billion) for fiscal 2007.
Announcing this, Finance Minister Ziyad Fariz said that excluding foreign aid, the projected budget deficit would reach 8.4 percent as a ratio of the country’s gross domestic product (GDP) in 2007, compared with 7.6 percent this year.
When foreign aid is taken into account, the deficit will drop to as low as 3.4 percent as a ratio of the GDP, compared with 4.5 percent in 2006, he added. The International Monetary Fund (IMF) advises countries to keep their budget deficit within a 3 percent limit as ratio of the GDP, economists said.
Fariz put the estimated local revenues for 2007 at 3.38 billion dinars and the expected foreign aid at 574 million dinars — 398 million dinars from Saudi Arabia, 92 million dinars from the United States, 58 millions from the European Union and 26 million from Japan.
He said the projected spending for 2007 represents a 10 percent increase over that of the current year.
The finance minister told the house that the budget projections for fiscal 2007 had the primary aim of achieving “self-reliance” in the coming three years and shoring up “sustained and balanced development”.
He expected the Jordanian economy to grow at a rate of 6 per cent this year, “which is one of the best international and regional growth rates”.
He reported a 28 percent increase in Jordan’s reserves of foreign currencies in 2006, to more than $6 billion.
Fariz said that the country’s inflation rate jumped to 6 percent this year compared with 3.5 percent in 2005, mainly due to a series of fuel price hikes in response to soaring oil prices on the world market.
He reported a 2 percent drop in Jordan’s total external and internal indebtedness, to 7.341 billion dinars at the end of October.
