“Despite the challenging circumstances brought on by the pandemic, sound policies have helped maintain macroeconomic stability. The government narrowed its primary deficit (excluding grants) by 1.2 percent of GDP to 4.5 percent of GDP in 2021. Revenue collection has remained robust, anchored in an institutional effort to tackle tax evasion and improve tax compliance,” Abbas explained.
The government, he noted, are on track to meet the 2022 target for the primary deficit (excluding grants) of 3.4 percent of GDP.
“At the same time, international reserves remain adequate, helped by prudent monetary policies, a resilient banking system, and robust external financing. New electricity tariffs were rolled out in early-April, which will boost Jordan’s competitiveness by lowering the costs for businesses,” Abbas added.
“Fiscal reforms will continue to center on broadening the tax base,” the IMF official underlined, pointing out that the recent passage of legislation unifying the tax and customs administrations in ASEZA under the national systems has delivered an important longstanding reform.
“Going forward, it will be critical to maintain reform momentum, notably, through introducing place-of-taxation rules into the GST law; strengthening the governance of fiscal incentives for investment; and improving tax and customs administration,” he further added.
Abbas said, “Due to its long-term fixed price gas import contracts for electricity generation, and adequate wheat reserves to hedge against possible global shocks, Jordan is better placed than many emerging markets to deal with higher food and fuel prices. However, it will be important to contain the cost of untargeted fuel subsidies, while protecting the most vulnerable through targeted support.”
“Moreover, efforts to better track, manage and disclose fiscal risks will be essential to improving the transparency and sustainability of public finances,” Abbas said.
“Finally, the authorities are committed to a fiscal strategy that will put Jordan’s public debt on a firmly downward path, achieving 80 percent of GDP in the medium-term,” he pointed out.
Source: Jordan News Agency