(MENAFN- Jordan Times) The government intends to take a set of measures to tackle the widening budget deficit which is expected to reach unprecedented levels later this year under the prevailing economic conditions, Prime Minister Fayez Tarawneh said Saturday.
Tarawneh said the package, which will be implemented soon before he presents his policy statement to Parliament on May 20, will include austerity measures to be adopted by government officials, reducing subsidies on certain commodities as well as amending some laws to increase state revenues, including the Income Tax Law.
Addressing a meeting with chief editors of daily newspapers and columnists, the premier said this economic package will partially tackle the widening budget deficit and will avoid harm to the low- and middle-income Jordanians, participants in the meeting and the Jordan News Agency, Petra, said.
Minister of Finance Suleiman Hafez told the meeting that the volume of government subsidies totals around JD2.386 billion annually.
Hafez added that if the current economic conditions continue without any measures, the 2012 budget deficit would widen to reach JD2.93 billion before foreign aid, which was projected to total JD870 million, and JD2.06 billion after foreign grants, thus raising public debt from JD14.3 billion to JD17.5 billion by the end of the year.
This makes it imperative on the government to mull immediate solutions, and citizens should be aware of the grave situation, Tarawneh, who took over as premier almost two weeks ago, added.
The premier said only JD18 million of the promised international assistance was received thus far.
He noted that the donor countries and international financial institutions are ready to help and extend the rest of the promised amounts to Jordan, but they want to see reform measures adopted by Jordan itself.
Jordanian citizens should be aware of the situation which is reaching worrying levels, Tarawneh said.
He noted that when he formed his government, he was shocked by the situation. "It is much worse than I expected," he emphasised.
He stressed that any lifting of subsidies would only be partial, and would exclude basic commodities such as bread, barley, kerosene, diesel and cooking gas cylinders.
This choice would not be easy on his transitional government which was mainly tasked with implementing political reforms leading to parliamentary elections before the end of this year.
This fact, he noted, would not stop him from taking any drastic economic measure "to stop bleeding" as every day of delay costs the country as a whole a lot.
The finance minister said one major problem was the rising oil prices, noting that every dollar above the price of $100 a barrel cost the treasury JD40 million a year.
In addition, when the state budget was prepared it assumed that the gross domestic product would grow by 3 per cent this year, but the present economic indicators show that it would range between only 2.5-2.7 per cent.
The government, he continued, is currently studying prices of commodities and services that would be revised.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.