Jordan’s lower house of parliament on Sunday approved what has been described as the most difficult budget in the kingdom’s history.
The draft budget law for 2021 and the budgets for independent public institutions were backed by a majority of MPs as the country attempts to rebuild its economy from the coronavirus pandemic.
The government submitted the law to MPs last month with an estimated post-foreign aid deficit of 2.06 billion Jordanian dinars ($2.89 billion), or 6.5 percent of gross domestic product (GDP), compared with 2.16 billion dinars in 2020.
Domestic revenues are estimated at around 7.8 billion dinars before foreign grants, which are expected to reach 577 million dinars, down from the 851 million dinars for 2020.
The value of total expenditure in the 2021 budget is expected to reach 9.93 billion dinars or 31.2 percent of GDP, compared with 9.37 billion dinars or 30.6 percent of GDP in 2020.
A total of 111 MPs of the 130-strong chamber took their turn to present their comments and concerns about the bill.
In response, Finance Minister Mohamad Al-Ississ renewed the government’s pledge not to impose any new taxes during 2021. But he warned that increasing public revenues as demanded by some MPs “requires some sacrifices, including imposing more taxes and termination of public employees.”
The minister told MPs that their demands for development and infrastructure projects in their constituencies were unrealistic considering the size of the budget.
He said the 2021 state budget is capable of addressing the challenges brought by the coronavirus pandemic and would prevent further shrinking of the economy.
The minister said inflation rates were projected to rise to “reasonable” this year, at 1.3 percent and that he expected a 6.5 percent growth in national exports with the world’s gradual recovery from the pandemic.
Al-Ississ had previously described the budget as “the most difficult for Jordan ever.”
Jordan imposed a nationwide lockdown from March 17 to May 30 last year in a bid to curb the spread of COVID-19, before gradually reopening some sectors.
Other areas of the economy remain closed until now with the possibility of imposing more coronavirus-containment restrictions with the rise in the number of infections.
Jordan registered around 4,000 infections on Sunday, the highest in more than two months
The unemployment rate in Jordan reached 23.9 percent in the third quarter of 2020, up by 4.8 percent compared with the same period of 2019, according to official figures.
Jordan’s economy is expected to grow by 1.8 percent in 2021 and 2 percent in 2022, according to a World Bank report.