Despite Rise in Revenues, State Budget Deficit

Despite a 14.5 per cent rise in domestic revenues and external grants extended to the Kingdom in 2007, the state budget recorded a deficit of 5.4 per cent of the gross domestic product (GDP), according to official figures released Monday. Although the country recorded a JD502.5 million increase in domestic revenues and grants, the 2007 budget deficit stood at JD614.5 million, an increase of 1 per cent from 2006. According to the Ministry of Finance monthly bulletin, external grants totaled JD343.4 million in 2007 compared to JD304.6 million in 2006 while domestic revenues were 14.5 per cent higher in 2007, amounting to JD3,628.1 million compared to JD3,164.4 million in 2006. The bulletin attributed the increase in the domestic revenues to a JD338.6 million rise in tax revenues, and similar raises in non-tax revenues and repayments by JD117.6 million and JD7.5 million respectively. The increase in tax revenues resulted mainly from a 20.1 per cent rise in sales tax equaling JD245.4 million, accounting for 72.5 per cent of the overall computed increase. Income tax revenue also grew by 20.3 per cent, or JD83.5 million, accounting for around 24 .7 per cent of the increase generated in overall tax revenues. Last year, repayments totaled around JD51.4 million compared to JD43.9 million in 2006, the ministry’s figures revealed. Total expenditures rose by 17.2 per cent, JD673.8 million, during this time, raising the expenditures volume to JD4,586 million. The rise was the result of a JD626.1 million increase in current expenses coupled with a 6 per cent increase in capital expenses equaling JD47.7 million. The increase in current expenses was due mainly to higher defense and security spending and the rising costs of basic staples, fuel subsidies, pensions and salaries. Interest rates on domestic and foreign loans also rose by 15.6 per cent, or JD49.5 million, the bulletin indicated. At the end of 2007, the outstanding external public debt (government and government-guaranteed) dropped by 5.6 basis points of the GDP to around JD5,253 million, representing 46.3 per cent of the Kingdom’s GDP. In 2006, the debt totaled JD5,187 million, 51 per cent of GDP. Higher exchange rates of international currencies against the US dollar and subsequently against the Jordanian dinar were the main reason behind the increase in the external debt volume, according to the Ministry of Finance data. Foreign debt service on commitment basis totaled around JD618.8 million, JD405.6 million of which were principal payments and JD213.2 million were interest payments. PM HIGHLIGHTS NEED TO CREATE JOB OPPORTUNITIES FOR YOUTH Monday 7 April 2008 Jordan News Agency Prime Minister Nader Dahabi on Sunday said the government has placed its hopes in the Jordanian Company for Training and Recruitment (JCTR) to create job opportunities for young persons. The company has the full support of the Ministry of Labour, the Jordan Armed Forces (JAF) and the private sector, the premier said. Chairing a meeting of the JCTR's higher committee yesterday, Dahabi stressed the importance of producing highly-skilled graduates who are competitive in the labour market. Dahabi also instructed the Labour Ministry to analyse the situation of guest workers in the Kingdom by sector so as to determine future training programmes, the Jordan News Agency, Petra, reported. The committee also stressed the need to provide all workers in the construction sector with social security, calling on the Ministry of Public Works and Housing and investors to hire trainees from the company for construction megaprojects in the Kingdom. JCTR Director General Brigadier General Salah Qudah said a total of 4,000 trainees have completed military training as of early February and are already training at nine vocational centres affiliated to the Vocational Training Corporation, Petra reported. The vocational training period is scheduled to end in May, when trainees will start receiving field experience. JCTR, with a capital of JD100,000, is working to provide young people with training and recruitment opportunities in the field of construction in conjunction with the Labour Ministry, the JAF and the private sector. In May 2007, His Majesty King Abdullah instructed the JAF to start recruiting unskilled civilians and train them in professions needed by the sector, which has been flourishing in the recent years with large-scale projects carried out in Amman, Aqaba and the Dead Sea. Meanwhile, the premier on Sunday also met with President of the Burundi Senate Rufyikiri Gervais, who is heading a parliamentary delegation to the Kingdom to discuss means to enhance bilateral ties. At the meeting, Dahabi stressed the importance of economic cooperation to increase trade volume between the two countries. Gervais expressed his country's appreciation for Jordan's efforts to preserve security and stability in Burundi through peacekeeping forces, highlighting the role Jordan plays in enhancing international security and stability. Gervais said Burundi was looking for Jordan's support to help rebuild the country and facilitate development, noting the country is currently focusing on education, health and agriculture infrastructure. Also yesterday, Senate President Zeid Rifai met with Gervais. At the meeting, Rifai stressed the Kingdom's eagerness to enhance cooperation with Burundi and African nations in various fields, particularly parliamentary cooperation. Meanwhile, Lower House Speaker Abdul Hadi Majali received Gervais and the accompanying delegation, stressing the importance of enhancing commercial exchange and investments, especially in the field of agriculture. The officials also reviewed the developments pertaining the Palestinian issue and the situation in Iraq.