Finance minister Suleiman Hafez has disclosed the IMF arrangement
Jordanian Minister of Finance Suleiman Hafez is estimating that the budget deficit in 2013 will be around 5.5 percent of GDP, 1.3 billion dinars after grants, and 2.2 billion dinars before grants
Hafez revealed that Jordan has turned to the International Monetary Fund (IMF) and the World Bank, to build a national economic reform programme and facilitate access to international funding.
Speaking in a press conference on Thursday, he said that the reform programme aims to help the national electricity company to cover the cost, in addition to removing subsidies on fuel, the adoption of the principle of progressive taxation, and the fight against tax evasion.
According to the agreement with the IMF, signed on May 27, removing subsidies on fuel will lower the subsidy bill to GDP by 0.7 percent in 2013, and the mechanism of monthly pricing will start from the beginning of 2013.
The agreement outlines that in the short-term, increasing the electricity tariff will be the only way to cover the losses of the national electricity company. This requires doubling the current average tariff, as the government intends to move gradually, to consider households with the lowest income.
The agreement considers the Water Authority as a major cause for concern in the budget of autonomous units, whose deficit must be reduced to two percent of GDP. This requires an increase in water tariffs in cooperation between the government and the World Bank.
The agreement estimates that total public revenue in the budget next year will reach 6.185 billion dinars, including 921 million dinars consisting of external grants.
It also anticipates that the total amount of public expenditure will be 7.5 billion dinars, of which 6.278 billion dinars are current expenditures and 1.22 billion dinars capital expenditure, thus fiscal deficit in next year\'s budget is 1.316 billion dinars.
The agreement estimates the total losses of the national electricity company during 2013 at about 900 million dinars, while the public debt is expected to jump to 19.9 billion dinars.