Economists dispute 2012 draft budget law
Reported by Omar Obeidat | Dec 25,2011 | 21:28
AMMAN – A group of economists on Saturday disputed the 2012 budget draft law claiming that major miscalculations may jeopardise the Kingdom’s economy.
In a study released yesterday, which was based on the figures and assumptions in the state budget draft law and the draft law of independent public institutions, the “forum for supporting economic policies” insisted that the figures and indicators in the draft laws did not reflect reality.
The 2012 state budget draft law, presented to the Lower House earlier this month, showed that the government’s overall expenditure will be JD6.8 billion and an estimated deficit of JD1.027 billion, or 4.6 per cent of the gross domestic product (GDP), while independent government entities will spend around JD1.8 billion, with a deficit of JD343 million.
The forum, launched by Talal Abu Ghazaleh Organisation early this year after dozens of experts joined the initiative to offer advise to decision makers, stressed that the government budget and the budget of independent institutions should have been merged in a single state budget.
The study indicated that, according to figures of the two budget draft laws, domestic revenues were estimated at JD5.7 billion while accurate calculations show it would stand at JD5.6 billion. Overall revenues including foreign grants for 2012, projected at JD966 million, will reach JD6.59 billion.
When these figures are compared with the revised figures of 2011 state budget, overall revenues will grow by 8.7 per cent only and not 12.6 per cent as announced in the budget draft law, Talal Abu Ghazaleh, head of the forum, explained.
With regards to the deficit in the state budget and the budget of independent institutions, the study noted it would reach JD2.06 billion after receiving foreign grants, while after excluding foreign aid the deficit would exceed JD3 billion, which means the deficit before including international assistance would represent 13.6 per cent of the GDP and 9.5 per cent of the GDP after calculating the assistance.
Due to the rising deficit even after receiving projected foreign aid, public debt is set to reach JD15.3 billion, or 70 per cent of the GDP, according to the findings of the study.
The alarming figures show the need for an urgent comprehensive medium-term economic reform programme, according to the economists.
Among the experts, who participated in yesterday’s press conference to reveal the findings of the study were former Royal Court chief Jawad Anani, former finance minister Suleiman Hafez, MP Reem Badran and economist Yusuf Mansur.
Abu Ghazaleh said members of the forum were ready to meet with Finance Minister Umayya Toukan to discuss the budget draft law and the study prepared by the team of experts.
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