The economic reform programme agreed upon with the IMF was formulated during the first half of 2016 and is due to be implemented starting in the second half of the year.
Therefore, 2017 is the first full year under reform.
This year’s programme calls for economic growth rate to be 3.3 per cent in constant prices.
The Ministry of Finance adopted this rather high estimate in the preparation of the budget.
The above growth estimate was based on the assumption that the economic growth rate in 2016 will be 2.8 per cent.
It turned out to be only 2 per cent. Therefore, we can reduce the above growth target to 2.5 per cent in 2017.
The programme projected the gross domestic product in current prices to reach JD29.6 billion.
This projection was based on the assumption that GDP will reach JD28 billion in 2016, but it turned out to be JD27.5 billion. Therefore, we can reduce the estimated GDP in 2017 to JD29.1 billion.
The programme aimed for public debt to stand at JD27.7 billion by the end of 2017.
This estimate was based on the assumption that public debt will be JD 26.3 billion by the end of 2016.
It turned out to be very close to reality. Based on the above, public debt will be allowed to rise in 2017 by an additional JD1.4 billion, or $2 billion.
Public debt is not measured in absolute figures only, it is also measured as a percentage of GDP.
The programme calls for a reduction of this ratio by 0.2 per cent despite the rise of debt by JD1.4 billion, as mentioned above.
This is obviously a very humble objective, but it will mark the first year in which the debt to GDP ratio will decline.
The IMF programme focuses on the major objective of reducing budget deficit. It aimed at reducing budget deficit in 2017 by JD165 million.
The Ministry of Finance has prepared the 2017 budget in compliance with the programme’s guidelines.
If the IMF economic reform programme will be actually implemented according to plan, the economic and financial positions will be in good shape in 2019.
During the third and last year of the programme, economic growth rate it will be 4 per cent of the GDP, JD33.5 billion, the gross debt will be JD28.9 billion, the debt/GDP ratio will be 86.3per cent and, believe it or not, the budget will post a surplus of JD170 million for the first time in recent history.