Public debt up, ratio to GDP down

AMMAN – Jordan’s public debt reached over JD20 billion by the end of June, according to recent official data. 

Although public debt went up by JD995 million or 5.2 per cent compared to that recorded by the end of last year, its ratio to the gross domestic product (GDP) went down to 78.5 per cent estimated for 2014 from 80.1 per cent in 2013, the official figures indicated. 

The figures released by the Ministry of Finance Sunday showed that the Kingdom’s external debt went up by JD1.15 billion during the first six months of this year to exceed JD8.3 billion when compared with JD7.2 billion registered by the end of 2013. 

The external debt ratio to the GDP went up to 32.8 per cent by the end of June, while in 2013 it stood at 30.3 per cent, according to the ministry’s report on the development of Jordan’s public debt. 

The rise in external borrowing is attributed to the US-guaranteed $1 billion eurobonds Jordan issued in New York on June 24. The interest rate on the five-year issuance was 1.9 per cent. 

The government has always stressed its desire to resort to international lenders to obtain cheaper loans than that offered by domestic banks as interest rates on local borrowing has hit the 8 per cent mark in recent years. 

The report revealed that the accumulative borrowing from domestic banks stood at JD11.7 billion by the end of June, constituting 45 per cent of the GDP, dropping by JD154 million from the end of last year. 

On developments in the state budget, the ministry report showed that domestic revenues, excluding foreign grants, rose by nearly 20 per cent from JD2.54 billion during the first half of 2013 to over JD3 billion in the January-June period of this year. 

Overall revenues, including grants, amounted to JD3.2 billion in the first half of 2014, while in the same period of last year it stood at JD2.9 billion despite the fact that the Treasury received lower foreign grants by the end of July of this year. 

Foreign grants received in the first half of 2014 saw a sharp drop of 33 per cent from JD433 million to JD291 million, the report said. 

The budget deficit in the first six months of this year was estimated at JD354 million compared with JD309 million registered by the end of June last year.