Friday 21 June 2024
Last update on Friday, June 21, 2024 At 7:30 AM
While growth has been revised downwards by the IMF (2.6% of GDP for 2024 instead of 2.7%), the new budget is a continuation of previous finance laws (LF). Its structure remains generally similar with domestic revenues not very diversified – made up of 70.4% tax revenues and 22.6% non-tax revenues – and a clear domination of current expenditure (86%) over capital expenditure (14 %).
Total revenues, up +12.7% compared to the 2023 budget execution, should amount to USD 14.5 billion in 2024, or 27% of GDP.
Although for the 4th consecutive year, no tax increase is planned in 2024, tax revenues will contribute 92% to this growth, in particular the tax on goods and services (46.3% of revenues). total) whose revenues are expected to increase by +17.2%. The government intends to continue its strategy of broadening the tax base by fighting against fraud and evasion rather than increasing rates.
The share of budgetary aid in grants in revenue is decreasing (7% for 2024, compared to 7.8% in 2023).
If the amount of donations planned in this budget is an increase of +1.4% compared to the amount received by Jordan last year, it has nevertheless been revised downwards (-10%) compared to the forecasts of the LF 2023. The government has indeed taken into account in this budget a possible redirection of international aid towards Ukraine and Palestine.
For 2024, it anticipates subsidies of USD 846.3 million from the United States, USD 64 million from the European Union and USD 65 million from the Gulf Development Fund.
Public spending is expected to increase by +12.4% compared to the 2023 budget execution to reach USD 17.45 billion, or 32% of GDP.
Now the second largest expenditure item after the civil service (24%), debt interest (2 billion JOD or 2.8 billion USD) represents 16% of total public expenditure.
Despite the current context, the share of military, security and public safety expenditure is decreasing, representing 13% and 12% of total expenditure respectively (compared to 14% and 13% in the 2023 FL).
Despite an increase of +25.4% compared to the 2023 budget execution, capital expenditure remains comparatively low (2.44 billion USD) and will be devoted, almost entirely (96%), to ongoing projects. .
The 2024 finance law thus provides for a widening of the deficit, excluding donations, which would go from -7.1% of GDP in 2023 to -7.4% of GDP in 2024 (-5.1% of GDP in 2023 to -5 .4% in 2024 including donations), in a context of worrying increase in public debt.
These forecasts are in line with those of the IMF but remain volatile due to the unpredictability of the current regional situation.
Source: French Embassy in Jordan
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