Amman, Dec. 11 (Petra) – Minister of Finance Abdelhakim Shibli stated that the 2026 budget embodies the government’s development vision and implements the second phase of its economic modernization plan, translating its objectives into high-quality projects across key sectors.

Speaking during the government’s response at a Lower House of Parliament session chaired by Speaker Mazen Qadi and attended by Prime Minister Jafar Hassan and the Cabinet, Shibli emphasized that the financial reforms and fiscal discipline policies adopted by the government have maintained the budget deficit within safe levels according to international standards.

"The government’s 2026 budget focuses on growth drivers identified in the Economic Modernization Vision, including energy, tourism, water, transportation, education, health, communications, and information technology," the Minister said. "As directed by His Majesty the King in the Throne Speech, our budget prioritizes major projects in health and education, including 191 projects for the Ministry of Education, of which 71 are for new school construction across the Kingdom. We have allocated JD 71 million for health sector capital projects, including new hospitals and health centers, as well as the expansion of existing facilities." Shibli highlighted that construction has already commenced on the Madaba Government Hospital, developed in partnership with the private sector, which will serve as a model for future public-private healthcare projects managed by the Ministry of Health.

The Minister noted that development projects included in the 2026 budget extend beyond decentralization efforts to encompass ministry, department, and government unit initiatives, ensuring comprehensive national coverage. He added that the budget was prepared amid significant regional and economic developments, yet Jordan’s economy has maintained financial stability and resilience.

"Indicators show strong performance," he said. "Real GDP growth reached 2.7% and 2.8% in the first and second quarters of 2025, the highest in two years. Inflation remained low at 1.9% over the first ten months, stabilizing the dinar and preserving citizens’ purchasing power. Foreign currency reserves reached $24.6 billion by the end of November 2025, covering over nine months of imports." The Minister underscored a 36% increase in foreign direct investment during the first half of 2025, totaling approximately $1 billion.

National exports rose 9.1% in the first nine months, while tourism revenues increased by $400 million, or 6.5%, compared to 2024, reaching around $6.6 billion. Remittances from Jordanians abroad rose by 4.1%. The current account deficit fell to 7.4% of GDP in the first half of 2025 and is projected to reach 5.1% for the full year.

Shibli also highlighted the comprehensive review of the national accounts framework conducted in coordination with the International Monetary Fund and ESCWA, which increased the GDP value for the 2023 base year by approximately JD 3.6 billion. "This reassessment strengthens the government’s capacity to reduce public debt and the budget deficit as a percentage of GDP to safe levels, while improving economic and public financial data quality," he noted.

The Minister affirmed that the budget deficit after grants remains at approximately 5.2% of GDP, with the primary deficit at 1.9%. Total public debt is gradually declining, with the debt-to-GDP ratio projected at 83.4% for 2025, excluding Social Security Investment Fund holdings, or 108.3% including them.

Shibli stressed fiscal prudence in response to Members of Parliament regarding the structure of public expenditure. "Current expenditures have averaged 86% of public spending in previous years, dominated by salaries, pensions, and debt servicing. Restructuring current versus capital spending requires achieving high economic growth to enable increased development expenditures without raising the deficit." He confirmed that salary increases are under consideration for 2027, provided they do not compromise financial stability.

Social protection allocations in 2026 will rise by approximately 9% compared to 2025, he pointed out.

Domestic revenue coverage of current expenditures will reach around 89% in 2026, increasing gradually to 94% by 2028, reducing reliance on foreign aid and enhancing economic resilience.

On taxation, Shibli noted a gradual increase in income tax revenues, expected to reach 25% of total tax revenues in 2026, while sales tax revenues will decline to 67%.

Addressing accumulated arrears exceeding JD 1 billion, primarily in energy, water, and medical treatment costs for the uninsured, the Minister said JD 320 million has already been paid to pharmaceutical companies, university hospitals, the King Hussein Cancer Foundation, the Jordan Petroleum Refinery Company, and contractors. "We will continue implementing our three-year plan to prevent new arrears from accumulating," he said.

The Minister concluded by reaffirming that the 2026 budget is development-oriented with a comprehensive social dimension. "We are confident that our policies will accelerate GDP growth to exceed 3% in 2026 and reach 4% by 2028, in line with the Economic Modernization Vision 2033." The budget sustains fiscal discipline, social protection, capital investment, and financial stability while stimulating private sector participation and long-term development.

//Petra// AJ