The Jordanian cabinet on Thursday endorsed the 2001 budget, which projects a 380 million Jordanian dinars deficit, or six percent of the GDP, and a four percent growth rate. Speaking to the press following a Cabinet meeting, Finance Minister Michel Marto said next year's budget will focus on boosting capital expenditure and being frugal on current expenditure.
“We will increase capital expenditure by more than 50 percent over that of the 2000 fiscal budget, while current expenditure will be raised by only 7.5 percent,” said Marto. The 2000 budget had forecast capital expenditure of JD435 million, and current expenditure of JD1.775 billion.
Although he did not disclose the size of the budget, Marto said the government is seeking to maintain a six percent deficit, which would represent a one percent drop from the 2000 deficit. This year, according to Marto, the budget deficit is estimated at JD410 million.
The minister also said that domestic revenues will offset current expenditure. “Our domestic earnings will be sufficient to cover all our expenditures,” the minister told reporters.
Marto attributed the shortfall in projected revenues for 2000 mainly to the slash in customs taxes. “Government revenues dropped by JD195 million, which forced us to reduce both capital and current expenditure by that amount,” he said.
The minister explained the measure was necessary in order to keep a balanced budget and the seven percent targeted deficit. “Current expenditure was cut by four percent only, since wages, pensions, interests and debt servicing fall under this spending category.
“But we reduced capital expenditure by 28 percent,” explained Marto. Next year, revenues will be increased by 16 percent over this year's, while expenditure will increase by 14 percent, said the minister.
As for the issue of hiking oil prices, Marto said a committee is currently discussing a possible increase, the results of which will be disclosed in the budget debate before Parliament scheduled for next Wednesday. — ( Jordan Times )
By Rana Awwad
© 2000 Mena Report (www.menareport.com)