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Sat 1 Jan 2011 03:10 PM

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Jordan’s 2011 budget deficit cut by over $700m

The deficit now amounts to 5.3% of GDP and is attributed to a drop in expenditure

Jordan’s 2011 budget deficit cut by over $700m
Jordans drop in public spending has been attributed to a 31.6 percent cut in capital expenditure

Jordan’s
austerity measures have begun to pay off, with the government’s latest budget
deficit decreasing by JD500m ($704m), the Minister of Finance said.

Delivering
the 2011 state budget speech to the Lower House of Parliament, Minister of
Finance Mohammad Abu Hammour said the deficit drop amounted to 5.3 percent of
gross domestic product (GDP).

Abu
Hammour said public expenditure will decrease by 2.5 percent to JD5.875bn
($8.2bn) and will now amount to 30 percent of the GDP, compared with 33.9
percent in 2009.

The
drop in public spending has been attributed to a 31.6 percent cut in capital
expenditure.

Jordan’s
economic growth is forecast to grow five percent in 2011, 5.5 percent in 2012
and six percent the following year, Abu Hammour said in November.

Inflation
in 2011 is forecast at four percent, dropping to 3.5 percent in 2012 and three
percent in 2013.

Jordan,
one of the smallest economies in the Middle East, imports more than 90 percent
of its oil and relies on foreign investment and grants to finance deficits in
the budget and the current account.

Foreign
grants more than doubled in the first eight months of the year to JD249m
($350m), compared with JD103m ($145m) in the same period of 2009.