AMMAN —
Jordan’s public debt has jumped by 1.6 percent in the first half of 2022,
reaching 88.4 percent of the country’s GDP, according to statistics by the
Ministry of Finance.
The data,
published on the ministry’s website, shows that the total public debt reached
JD36.5 billion in this period; of this, JD13.89 billion is internal debt and
JD15.26 billion is external debt.
According to
economic expert Fahmi Al–Katout, “the public debt-to-GDP ratio that has been
announced by the government is not accurate. It actually surpasses 110 percent
when the government’s debt to the
Social Security Corporation (SSC) is
calculated as well”.
He said that “the
government owes around JD7 billion to the SSC, and ignoring this number is an
underestimation of the Jordanian people’s debts because the SSC is owned by the
Jordanian people, it is not a sovereign institution”.
Katout pointed
out that “the increasing public debt would cost the country’s economy heavily.
The annual cost of debt is estimated at over JD1.6 billion, roughly equivalent
to what the country spends on education and health”.
“The higher the
public debt gets, the worse services Jordanians have,” he added.
According to
Katout, “the higher debt will also affect Jordan’s solvency, as it will
increase the interest on any further loans”.
He said that the
government has to decrease its dependency on taxes and work on improving the
economy and investment, which would help lower the unemployment rate and help
the economy grow.
“Neither this government
nor any other government can lower the public debt, or even stop it from
increasing, but this does not mean that there are no solutions,” he said.
Economic expert
Mufleh Aqel told
Jordan News that the constant increase in public debt is due
to spending more than incoming money.
“Other reasons
may include the increased cost of interest and delayed aid, but the main reason
is the excess of expenditure over income,” he reiterated, stressing that
“controlling the public debt will not be possible without a sharp decrease in
expenditure”.
Jordan’s current
expenditure are projected to stand at JD9.117 billion, 65 percent of which will
go for public sector salaries, according to the Ministry of Finance.
“The government
cannot cut wages to reduce expenditure, because wages are already insufficient,
in light of the high inflation rate, but it can freeze wages for two or three
years,” suggested Aqel.
“Even this (wage
freeze) would add to the burden on people,” Aqel said.
“Our only choice is to
depend on our own resources. We hope that the new economic plan would include
methods to improve the country’s income. The only exit for us is to expand the
production base to reduce the deficit.”
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