AMMAN — The Lower House has referred the draft General Budget Law for the fiscal year 2025 to its Financial Committee, which will begin discussions with ministries, government units, and institutions. Recommendations will then be submitted to the Chamber for further deliberations.

 

Addressing lawmakers, Finance Minister Abdul Hakim Shibli said that the government is developing a plan to replace high-cost debt with soft loans to stabilize external debt servicing costs and maintain stable interest rates on current expenditures in the coming years. "The budget focuses on reducing public debt through economic growth, securing funding for major projects in line with the Economic Modernisation Vision."

 

He said that the budget law reflects the government’s policy priorities and future objectives in harmony with the Royal directives outlined in the Speech of the Throne at the opening of the 20th Parliament’s regular session.

 

"Despite political and security challenges in the region, the national economy has maintained stability, demonstrated resilience and achieved positive indicators," the minister said. 

 

Shibli said that Jordan has completed the second review of its fiscal and economic reform programme with the International Monetary Fund, which affirmed the country’s financial and monetary stability. "Credit rating agencies have also raised Jordan’s credit rating, highlighting the effective macroeconomic management and structural reforms that bolster international confidence in the national economy."

 

He added that preliminary indicators for the first half of 2024 showed improvement in economic fundamentals, with GDP growing by 2.2 per cent at constant prices, projected to reach 2.3 per cent for the entire year. Unemployment dropped to 21.4 per cent compared to 22.1 per cent during the same period in 2023, he said. 

 

Shibli said that the trade deficit decreased by 3 per cent during the first three quarters, amounting to approximately JD6.9 billion, while remittances from Jordanians abroad increased by 3.2 per cent to reach JD1.875 billion. Prudent monetary policy helped maintain foreign currency reserves above $20 billion, sufficient to cover eight months of imports, stabilizing the Dinar exchange rate and preserving purchasing power amid low inflation at 1.6 per cent.

 

The improvement in economic indicators during the third quarter of 2024 compared to the same period in 2023 underscores the ongoing recovery of the national economy. Domestic revenues for 2024, however, remain below expectations despite an estimated increase of JD186 million compared to 2023. External grants are projected at JD739 million, the minister said. 

 

In terms of expenditures, he said that the government prioritized key projects while reducing current spending, estimating 2024 operational expenses at JD10.538 billion and capital expenditures at JD1.26 billion. "Total public expenditures were recalculated at JD11.798 billion."

 

"As a result of revenue and expenditure adjustments, the 2024 budget deficit after grants is projected at JD2.441 billion, or 6.5 per cent of GDP, while the primary deficit is estimated at 2.9 per cent of GDP. Consequently, public debt is expected to reach approximately 90 per cent of GDP for 2024. The calculation of public debt excluding social security obligations aligns with global practices and agreements with international institutions for comparability with similar economies."

 

The Finance Ministry remains committed to repaying installments and interest to the Social Security Fund, with payments reaching JD743 million in 2022 and exceeding JD1 billion in 2023, he said.

 

"The draft General Budget Law for 2025 reflects realistic estimates based on achievable assumptions and several key indicators. The economy is projected to grow at a real GDP rate of 2.5 per cent in 2025, increasing to 3 per cent in 2026 and 2027. Nominal GDP is expected to grow by 4.9 per cent in 2025 and 5.6 per cent in 2026 and 2027."

 

Shibli attributed the anticipated growth is to improved performance in vital sectors such as construction, tourism, and industry, as well as increased export growth. "Additional drivers include the positive effects of lower interest rates, which will expand local credit and stimulate investment, and the implementation of major projects such as the National Carrier Project, railway infrastructure, and the construction of new hospitals and schools."

 

"Inflation rates are expected to remain moderate, with a projected 2.2 per cent in 2025, 2.5 per cent in 2026, and a decline to 2.3 per cent in 2027. The current account deficit in the balance of payments, as a percentage of GDP, is projected to reach approximately 4.6 per cent in 2025, decreasing to 4.1 per cent in 2026 and 3.8 per cent in 2027."

 

Current expenditures in 2025 are estimated at approximately JD11.042 billion, reflecting an increase of JD504 million, or 4.8 per cent, compared to the revised 2024 level, the minister noted, adding that capital expenditures for 2025 are estimated at around JD1.469 billion, a rise of JD209 million or 16.5 per cent over the revised 2024 level.