Jordan unveils financial reform package to cut budget deficit

Jun 17, 2010, 17:31 GMT

Amman - The Jordanian government on Thursday unveiled a financial and economic reform package, primarily designed to reduce an unprecedented public budget deficit and deal with the ramifications of the global financial crisis.

'The world crisis has been so harsh on all countries including Jordan, a state with limited resources,' Finance Minister Mohammad Abu Hammour said at a press conference.

Abu Hammour said that the new three-year financial blueprint calls for taxes on gasoline, mobile calls, tobacco and alcohol to be raised, and subsidies on other items to be removed.

He said that the tax on gasoline would increase by 12 to 18 per cent, depending on the quality of the product.

He expects the budget deficit, which hit an all-time high of more than 2 billion dollars in 2009, to shrink as a result of the new measures.

The financial plan calls for the deficit to reach 3 per cent of the gross domestic product in 2013, down from 9 per cent last year.

Abu Hammour said that the package also had the aim of achieving 'a sustainable growth rate' and attracting more foreign investments to the kingdom.

He expects Jordan to attain a real growth rate of 4 per cent in 2010, 5 per cent next year and 6 per cent in 2013, compared with 2.8 per cent in 2009.