The kingdom's 2016 state budget would assume an average oil price of $60 per barrel and a gross domestic product growth rate of 3.7 percent, according to the General Budget Department (GBD).
The budget bill of 2015 was planned on an average price of $100 a barrel for Brent crude, but for the period of 2016-2018 the spending bills would be based on $60 a barrel, according to a circular sent by Prime Minister Abdullah Ensour to budget planners.
GBD Director Mohammad Hazaimeh told The Jordan Times that the economic growth assumption for next year was put at 3.7 percent, which is the same projection of the International Monetary Fund (IMF) and the World Bank.
For 2017 and 2018 the economy is expected to grow by 4.5 percent, he said.
Regarding inflation in the 2016 spending bill, which is still in preparation, the GBD director said it is forecast to reach 3.1 percent next year, 2.4 percent in 2017 and 2.1 in 2018, adding that national exports are projected to grow by 5 percent next year.
Imports are forecast to grow by 2.5 percent in 2016.
On the size of the budget, Hazaimeh said the exact figure is still unclear as planners are still discussing the financial needs of government agencies, indicating that the main pillars of the budget are set to be finalized next month.
World Bank revises growth rate for 2015
In a report released recently by the World Bank on the Middle East and North Africa Economic Monitor –– titled: Inequalities, Uprisings and Conflict in the Arab World –– the global financial institution said Jordan’s economy is expected to slow down in 2015 and cut its growth forecast from 3.1 percent to 2.5, building the forecast on the growth rate recorded in the first quarter, at 2 percent.
Also this month, the IMF lowered its growth forecast of the kingdom's economy to 2.9 percent based on economic expansion achieved in the first quarter.
The bank also attributed the slowdown in economic activity to the effects of security spillovers from regional conflicts and a total shutdown of the trade routes with Syria and Iraq.
The slowdown to 2 percent growth in the first quarter of 2015, which according to the report is the slowest since the third quarter of 2010, was led by a contraction in construction and “hotels and restaurants” sectors by 3.4 percent and 6 percent respectively, while the “mining and quarrying and agriculture” did better during the said period.
By Omar Obeidat
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