Jordan, which has no natural resources and imports all of its energy, needs to invest as much as US$25bn over the coming ten years to help it become self sufficient, the Jordan Times reported, citing Jordan Economic Social Council President Jawad Anani.
The number of refugees from Syria that have fled to Jordan as a result of a 19-month uprising against President Bashar al-Assad has caused Jordan to incur additional costs estimated at JD600m (US$846m) annually, the newspaper cited Anani as saying.
Jordan imports 96 percent of its fuel needs (the daily equivalent of 100,000 barrels of a oil a day), and until recently was dependent on Egypt for its gas supply, which has caused its public debt to soar. The country relies on foreign grants and aid to finance its fiscal deficit.
Multiple attacks on a pipeline that supplies gas from Egypt to Jordan and Israel disrupted imports and increased the kingdom’s energy bill. It has also pressured the country to speed up ways to find alternatives that would make it less dependent on importing of its energy needs. The government accumulated over JD2.8bn in debt because it had to produce electricity from fuel rather than gas as a result of the disruption to supply from Egypt.
Jordan traditionally finances its budget and current-account deficits with foreign investment and grants from the Gulf states, the EU and the US. The kingdom’s public debt-to-GDP ratio increased to about 64 percent by end-2011. Its fiscal deficit could rise to JD2.93bn (US$4bn) this year if economic conditions in the country do not improve, the Jordan Times reported, citing Minister of Finance Suleiman Hafez. The kingdom’s debt would rise to JD17.5bn by the end of the year from JD14.3bn.
The overall budget deficit has increased to about 6 percent of GDP in 2011 as a result of commodity subsidies, other social spending and borrowing by the government on behalf of Jordan’s National Electric Power Company to cover more costly imported fuel oil used during extensive periods of interrupted natural gas supply when saboteurs attacked pipelines in Egypt over the past year and a half.
Jordan’s economy is forecast to grow 3 percent this year from an estimated 2.6 percent in 2011, while inflation is projected to rise to 4.5 percent from 4.4 percent last year, according to the IMF.
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