AMMAN — The
public debt-to-
GDP ratio in Jordan has reached 110.6 percent in the first five
months of this year, according to the Ministry of Finance.
اضافة اعلان
On Sunday, the
ministry said in a press statement that the total public debt amounted to
JD36.319 billion in the first five months of 2022. Jordan’s internal debt
reached JD13.8 billion at the end of last May, while its external debt was more
than JD15.2 billion.
Political economist
Zayyan Zawaneh told
Jordan News that over the past five years, the
public debt has been rising at an accelerated rate. In 2020, it rose from JD33
billion to JD34 billion and in 2021 it reached JD36 billion. Meanwhile, Zawaneh
said, the government owes about JD2 billion to the Jordan Petroleum Refinery, hospitals,
municipalities, public universities, contractors, and pharmaceutical
distributors, among others, so the actual public debt figure is JD38 billion.
Zawaneh added that
the high cost of servicing the public debt as a result of rising interest rates
both locally and globally “poses a significant risk to the government’s ability
to borrow, especially from abroad, and represents a major obstacle to economic
growth due to the leakage of funds outside the Kingdom, which weakens its
ability to attract new investments”.
Zawaneh accused the
government of being “naïve” in dealing with the public debt dossier when it
decided that funds borrowed from the
Social Security Investment Fund (SSIF) will not be counted as part of the public debt.
The Ministry of
Finance announced last year that it had changed its methodology of calculating
its public debt, in agreement with the International Monetary Fund, so that the
money it owes to the SSIF, which amounted to some JD7 billion, would be
excluded from debts.
It now considers
money borrowed from the SSIF, municipalities and independent bodies as debt
from government institutions.
Economic and
investment advisor
Wajdi Makhamreh considers the rise in public debt “as a
dangerous indicator” that the government is not looking for additional revenue
sources to support the state budget.
He said the
government is slow in investing in new resources that have not been exploited
and that may constitute a good source of revenues.
Makhamreh added
that there was clear mismanagement of the economic file and that the government
finds it easier to resort to borrowing because of the chronic budget deficit,
but fails to adopt real steps to control expenditures that drain state
revenues.
Economist
Mohammad Al-Bashir told
Jordan News that the latest figures show that the
government cannot control spending and that it is insisting on the same
political and economic approaches. They also mean that the economy does not
pump much-needed money into the Treasury, he added.
Bashir said that political reform is needed more than ever
now to address financial and economic policies.
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