Austerity imminent as economic woes hit Jordan
Jordan's high and rising public debt has worried the International Monetary Fund and prompted a downgrade from Standard & Poor's. So the government is planning a blast of austerity by year-end.
Tax hikes and subsidy cuts - likely to be highly unpopular - are on the agenda as the country's debt to GDP ratio has reached a record 95 percent, from 71 percent in 2011.
"Postponing problems might increase the popularity of the government but would be a crime against the nation," Prime Minister Hani Mulki told a group of parliamentarians this week.
After an IMF standby arrangement that brought some fiscal stability, Jordan agreed last year to a more ambitious three-year program of long-delayed structural reforms to cut public debt to 77 percent of GDP by 2021.
The debt is at least in part due to successive governments adopting an expansionist fiscal policy characterized by job creation in the bloated public sector, and by lavish subsidies for bread and other staple goods.
It also hiked spending on welfare and public sector pay in a move to ensure stability in the aftermath of the "Arab Spring" protests in the region in 2011.
But the economy has slowed, battered by the turmoil in neighboring Syria and Iraq.
The economic strains reduced local revenue and foreign aid, forcing Jordan to borrow heavily externally and also resort to more domestic financing.
Although there has been some progress this year with improving remittances, tourism and some rebound in exports, there has been no pickup in growth since 2015 - with the officials forecasting 2 percent growth this year from an earlier IMF 2.3 percent target.
"This year we are at a crossroads. Everything I am trying to do is to stop the haemorrhage and start breathing," Mulki was quoted as saying at another meeting to garner support.
The rising debt accentuated by the protracted regional conflicts on Jordan's borders was the main reason Standard and Poor’s last week downgraded its sovereign rating to B+.
(Source: Reuters)
Largest global journalists’ union urges Jordan to free pro-Palestine reporter
Iran, Qatar support Yemen’s territorial integrity amid Saudi-Emirati clashes in south
Media advocates call for release of pro-Palestine reporter in Jordan
Qassam Brigades confirms martyrdom of its spokesman Abu Obeida
VIDEO | Israelis continue spying for Iran!
Iran Armed Forces pledge firm response to any hostile act
General Soleimani was 'architect of Axis of Resistance’ in region: Iran FM
VIDEO | Somalis protest against Israel's recognition of Somaliland
UN rapporteur says Georgetown cut ties over exposing Israel’s genocide in Gaza
VIDEO | Press TV's news headlines
West-funded body conspired against EU anti-fraud office after corruption findings: Report
PressTV NEWSLETTER
now
This makes it easy to access the Press TV website
