Country Listing

Jordan Table of Contents



The discrepancy between income and expenditures appeared each year as the difference between the planned and actual budget deficit, with disclosure of the latter figure often delayed considerably. For example, the 1988 budget called for a JD67 million deficit, but the 1989 budget planned for a JD122 million deficit. Although the actual 1988 deficit had not been announced by early 1989, the Ministry of Finance disclosed that the planned 1989 deficit represented a 45 percent reduction from the 1988 level. The minister of finance claimed that the government's 1989 assessment of income and spending was more realistic than in previous years, and that the government was committed to adhering strictly to the budget (see table 6, Appendix).

Years of deficit spending effectively precluded the option of pursuing a relaxed fiscal policy, which Jordan's price deflation might have warranted in 1989. The 1989 budget called instead for austerity to achieve cuts in spending from 1988 levels. The 1989 budget forecast an expenditure of JD1 billion, as compared to JD1.1 billion in the 1988 budget. Of the 1989 planned expenditure, capital investment and development spending were budgeted at JD346.5 million, a cut of JD105 million from the previous year. This cut apparently reflected the government's inability to spend the full capital budget in 1988 because of the economy's limited absorptive capacity. Recurrent expenditure was budgeted at JD688.9 million, an increase of about JD65 million over 1988. Insofar as the defense component of recurrent expenditure was cut JD4.5 million from 1988, it appeared that other recurrent spending, for example on government salaries and services, was set to increase (see table 7, Appendix).

Data as of December 1989