Jordan Times
Monday, July 19, 2004
Drop in foreign grants
takes budget into deficit despite rise in domestic revenues
By Rami Abdelrahman
AMMAN — Total government revenues and grants dropped during the first five
months of this year by 11.9 per cent or JD123.1 million to JD 914.9 million from
JD1,038 million during the same period last year.
According to the summary of fiscal developments released by the Ministry of
Finance, the fall was mainly due “a decline in foreign grants which amounted to
JD66.9 million, compared to JD403.6 million received during the same period last
year.”
The report showed domestic revenues at JD848 million, JD213.6 million higher
than the JD634.4 million posted during the same period last year.
“The rise in domestic revenues resulted from increases in tax revenues, nontax
revenues and repayments by JD166.6 million, JD23.1 million and 23.9 million
respectively,” the report indicated.
The increase in tax revenues was due to higher receipts from income tax, general
sales tax, customs duties and others.
According to Finance Minister Mohammad Abu Hammour, the surge in tax revenues
was only achievable after enhancing tax collection tools and reforming financial
entities in the Kingdom.
Concerning nontax revenues, the report attributed the increase to expanded
income from licensing, fees, profits on one-hand, and a decrease in
“miscellaneous” on the other.
The total expenditures amounted to JD942.7 million during the first five months
of the current year, decreasing by 2.7 per cent from last year's same period
record of JD968.6 million.
“The drop in total expenditures resulted from lower capital expenditure by JD1.8
million or 1.2 per cent, and a decrease in current expenditure by 24.1 million
or three per cent,” the Finance Ministry said.
The government vowed on various occasions to cut down its expenditures during
the current fiscal year.
According to report, the overall budget went into a JD27.8 million deficit
during the five months of this year compared to a JD69.4 million surplus during
the same period of last year.
Another report issued by the Ministry of Finance put the public debt as of June
30 at JD6,901 million (90 per cent of estimated the 2004's estimated gross
domestic product (GDP) of JD7,670 million.
JD5,222 million was classified as external debt, and JD1,679 million was
domestic.
At the end of May 31, the outstanding net total debt both domestic and external,
amounted to JD6,881 million, or 89 per cent of the 2004's estimated GDP.
For comparison, the outstanding net total debt during last year's first five
months recorded JD7,095 million or 100.6 per cent of 2003's GDP of JD7,056
million.
Accordingly, the report points out that net public debt decreased at the end of
May 2004, by JD214 million or three per cent compared to its level at the end of
2003.
The external debt at the end of May amounted to JD5,234 million which equals
68.2 per cent of this year's estimated GDP, while last year's governmental
performance indicate it recorded JD5,392 million (76.4 per cent of GDP).
However, total external debt service (government and government-guaranteed on
cash basis amounted to JD214.3 million during the first five months of 2004 of
which JD174 million were principal payments and JD39.8 million were interest
payments.
Taking into account the rescheduled debt, debt service on a commitment basis
rises to JD269.2 million, of which JD208 million were “principal payments” while
JD61.2 million were interest payments, according to the summary.
Classifiying the external debt by maturity dates, the ministry's Public Debt
Department shows that 46.5 per cent of external debt is due in more than 20
years and 43.3 per cent is due in 15 to 20 years. On the other hand, 56.1 of
Jordan's external outstanding debt as of June 30, 2004 has a fixed interest rate
of which 37.5 per cent with a rate of two per cent or less, while 29.6 has a
rate ranging between two and four per cent.
Industrial countries are the main creditors to Jordan as their NODA and ODA debt
accounts for 63 per cent of the total, while the debt of multilateral
institutions account for 31.4 per cent.
The main currencies that forumulate external debt are US dollar (29.4 per cent),
Japan yen (21.6 per cent), EU euro (20.3 per cent) and Kuwaiti dinar (10.5 per
cent).
Meanwhile, domestic debt (budgetary central government) at the end of May 2004,
declined to JD1675 million or 21.8 per cent of GDP compared to JD1711 million or
24.2 per cent of GDP at the end of 2003.
Also, the report says, net outstanding domestic debt (budget and own-budget
agencies) at the end of May 2004 decreased to JD1647 million or 21.5 per cent of
estimated GDP for 2004 compared to JD1703 million or 24.1 of GDP for 2003.
The Jordanian dinar's exchange rate is fixed at $1.41.