By Suleiman al-Khalidi
AMMAN, Oct 24 (Reuters) - Jordan's budget deficit rose to 876 million dinars ($1.23 bln) in the first nine months of 2009, more than double the figure for the same period of last year, finance ministry statistics released on Saturday showed.
The latest preliminary figures included only 103 million dinars of grants from donor countries, which are traditionally used to cover some budget shortfalls but have fallen substantially this year due to the global financial crisis.
Jordan's public finances are under strain as the global economic downturn hurts domestic demand and foreign cash flows, including remittances from expatriates in the Gulf.
Policymakers are seeking more innovative ways to finance a deficit worsened by the inability to cut high spending on salaries, pensions and debt interest.
Prime Minister Nader Dahabi this week said the 2009 deficit should remain within a forecast 1.1 billion dinars ($1.6 bln) or 7 percent of gross domestic product (GDP), while economic growth slows by almost half to between 3 to 4 percent.
The latest deficit figures compare with a 349.2 million dinar budget deficit in the first nine months of last year.
Traditionally hundreds of millions of dollars of grants and aid from Western donors and Gulf Arab states have cushioned Jordan's economy from disruptions and help finance almost half of it's budget deficit.
DEPENDENT
The aid-dependent kingdom has close business and economic ties to Gulf Arab governments, who have been hard hit by a drop of oil prices -- their main source of state revenue. The global downturn has also hit key earners such as tourism and exports.
Total revenues -- which include general sales tax, income taxes and grants -- fell 9.1 percent year-on-year in the first nine months of 2009, to 3.252 billion dinars.
Officials say revenues this year are expected to fall at least 13 percent from estimates set in the 2009 budget due to a drop in sales tax and revenues from real estate deals.
Total expenditure, mainly salaries on a bloated civil service that comprises the biggest part of the budget, rose 4.5 percent to 4.117 billion dinars in the first nine month of the year against the same period last year, released data showed.
Public spending soared after the government approved an expansionary 2009 budget and began drawing from its allocations early in the year to boost a programme of upgrading infrastructure, officials say.
Figures show capital expenditure continuing to rise in the first nine months of the year, reaching 863 million dinars against 633 million dinars in the same period last year.
A downsized 5.565 billion dinars budget for 2010 was unveiled this month that seeks to scale down expenditure.
Independent economic analysts say formidable political obstacles face downsizing a bloated public sector where hiring is mainly based on patronage in a tribally based kingdom.
(Writing by Suleiman al-Khalidi; Editing by Patrick Graham)
($1 = 0.709 dinar) Keywords: FINANCIAL JORDAN/BUDGET (suleiman.al-khalidi@thomsonreuters.com,Reuters Messager: suleiman.al-khalidi.reuters.com@reuters.net; +96 279 5521407) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
AMMAN, Oct 24 (Reuters) - Jordan's budget deficit rose to 876 million dinars ($1.23 bln) in the first nine months of 2009, more than double the figure for the same period of last year, finance ministry statistics released on Saturday showed.
The latest preliminary figures included only 103 million dinars of grants from donor countries, which are traditionally used to cover some budget shortfalls but have fallen substantially this year due to the global financial crisis.
Jordan's public finances are under strain as the global economic downturn hurts domestic demand and foreign cash flows, including remittances from expatriates in the Gulf.
Policymakers are seeking more innovative ways to finance a deficit worsened by the inability to cut high spending on salaries, pensions and debt interest.
Prime Minister Nader Dahabi this week said the 2009 deficit should remain within a forecast 1.1 billion dinars ($1.6 bln) or 7 percent of gross domestic product (GDP), while economic growth slows by almost half to between 3 to 4 percent.
The latest deficit figures compare with a 349.2 million dinar budget deficit in the first nine months of last year.
Traditionally hundreds of millions of dollars of grants and aid from Western donors and Gulf Arab states have cushioned Jordan's economy from disruptions and help finance almost half of it's budget deficit.
DEPENDENT
The aid-dependent kingdom has close business and economic ties to Gulf Arab governments, who have been hard hit by a drop of oil prices -- their main source of state revenue. The global downturn has also hit key earners such as tourism and exports.
Total revenues -- which include general sales tax, income taxes and grants -- fell 9.1 percent year-on-year in the first nine months of 2009, to 3.252 billion dinars.
Officials say revenues this year are expected to fall at least 13 percent from estimates set in the 2009 budget due to a drop in sales tax and revenues from real estate deals.
Total expenditure, mainly salaries on a bloated civil service that comprises the biggest part of the budget, rose 4.5 percent to 4.117 billion dinars in the first nine month of the year against the same period last year, released data showed.
Public spending soared after the government approved an expansionary 2009 budget and began drawing from its allocations early in the year to boost a programme of upgrading infrastructure, officials say.
Figures show capital expenditure continuing to rise in the first nine months of the year, reaching 863 million dinars against 633 million dinars in the same period last year.
A downsized 5.565 billion dinars budget for 2010 was unveiled this month that seeks to scale down expenditure.
Independent economic analysts say formidable political obstacles face downsizing a bloated public sector where hiring is mainly based on patronage in a tribally based kingdom.
(Writing by Suleiman al-Khalidi; Editing by Patrick Graham)
($1 = 0.709 dinar) Keywords: FINANCIAL JORDAN/BUDGET (suleiman.al-khalidi@thomsonreuters.com,Reuters Messager: suleiman.al-khalidi.reuters.com@reuters.net; +96 279 5521407) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
