Public debt remains a persistent challenge for Jordan’s economy. Yet when managed wisely, it is also a vital instrument for maintaining fiscal stability and financing development priorities. Effective debt management rests on three main pillars: controlling current spending, stimulating economic growth to boost revenues, and diversifying debt instruments by replacing high-interest borrowing with lower-cost alternatives. Together, these measures should form the foundation of a coherent debt management strategy aimed at ensuring long-term fiscal and economic sustainability.
During the first eight months of 2025, Jordan’s public debt rose by 2.688 billion dinars, sparking debate between those who see borrowing as necessary to meet financing needs and those who view it as a source of concern. To interpret this properly, the increase must be understood in the broader context of the country’s fiscal performance. Total government spending during this period reached 7.795 billion dinars, equivalent to 31 per cent of GDP, with an average monthly expenditure of 974.4 million dinars. Domestic revenues amounted to 6.194 billion dinars, or 24 per cent of GDP, averaging 774.3 million dinars per month. This created a monthly fiscal deficit of about 200 million dinars, totaling 1.6 billion dinars over the period, or roughly 6.4 per cent of GDP, amid a steep 61.9 per cent decline in foreign grants to just 30.2 million dinars.
Despite the fall in grants, domestic revenues showed improvement, rising to 6.194 billion dinars from 5.972 billion in 2024 an increase of 257 million dinars. This improvement reflects more efficient tax collection, particularly in sales tax, which grew and helped offset a decline in income tax revenues caused by slower economic activity. The increase in domestic revenues helped stabilize fiscal performance and improved the self-reliance ratio measured as domestic revenues to current spending from 84.9 per cent to 87.6 per cent.
Spending growth remained contained. Current expenditures increased by 6.3 per cent to reach 7.069 billion dinars, while capital expenditures rose by 13.5 per cent to 725.6 million dinars. This shift toward productive spending indicates a focus on supporting growth rather than expanding operational costs. However, there is still a need for greater transparency regarding how these funds were allocated and which sectors benefited. Since investment inflows do not fully cover capital expenditures, borrowing becomes an economic necessity, provided it is managed prudently and directed toward projects that enhance long-term growth.
Diversifying debt instruments is another essential aspect of sound fiscal management. Jordan has made progress in this area by repaying Eurobond maturities through concessional financing from friendly countries and issuing Islamic Sukuk to utilize excess liquidity in Islamic banks, providing lower-cost financing alternatives. These measures enhance debt sustainability and improve the government’s capacity to manage its financial obligations efficiently.
Taken together, recent fiscal data reveal several encouraging trends. Current spending remains under control, rising modestly by around 6 per cent, which reflects fiscal discipline. Economic growth is showing signs of improvement, with GDP expanding by 2.7 per cent in the first quarter and 2.8 per cent in the second quarter, supported by policy measures that boosted revenues and narrowed the deficit. Debt management practices are also becoming more diversified, helping to reduce borrowing costs and strengthen fiscal efficiency. If this approach continues, it could gradually reduce the public debt-to-GDP ratio, even if temporary increases occur in the short term.
Public debt, therefore, is not inherently problematic. What matters most is how it is used. When guided by sound principles and a clear strategy focused on growth and sustainability, borrowing can serve as a powerful tool for development and economic resilience. The real concern lies not in the size of the debt, but in the absence of transparency, strategy, and purpose. Borrowing should always serve defined economic objectives supporting growth, improving efficiency, and ensuring fiscal sustainability.
The crucial distinction is between those who borrow to invest in productive capacity and those who borrow merely to cover current expenses and service existing debt. A comprehensive understanding of public debt must take into account growth, efficiency, and sustainability as interconnected factors. Numbers alone are not sufficient; what truly matters are the underlying questions: how is the debt managed? Does it contribute to development? Does it safeguard fiscal stability?
Jordan’s fiscal debate should move beyond asking “Who borrows more?” to addressing “How effectively is borrowing used?”—because effectiveness, not volume, is what determines the real economic impact of public debt.
Public debt remains a persistent challenge for Jordan’s economy. Yet when managed wisely, it is also a vital instrument for maintaining fiscal stability and financing development priorities. Effective debt management rests on three main pillars: controlling current spending, stimulating economic growth to boost revenues, and diversifying debt instruments by replacing high-interest borrowing with lower-cost alternatives. Together, these measures should form the foundation of a coherent debt management strategy aimed at ensuring long-term fiscal and economic sustainability.
During the first eight months of 2025, Jordan’s public debt rose by 2.688 billion dinars, sparking debate between those who see borrowing as necessary to meet financing needs and those who view it as a source of concern. To interpret this properly, the increase must be understood in the broader context of the country’s fiscal performance. Total government spending during this period reached 7.795 billion dinars, equivalent to 31 per cent of GDP, with an average monthly expenditure of 974.4 million dinars. Domestic revenues amounted to 6.194 billion dinars, or 24 per cent of GDP, averaging 774.3 million dinars per month. This created a monthly fiscal deficit of about 200 million dinars, totaling 1.6 billion dinars over the period, or roughly 6.4 per cent of GDP, amid a steep 61.9 per cent decline in foreign grants to just 30.2 million dinars.
Despite the fall in grants, domestic revenues showed improvement, rising to 6.194 billion dinars from 5.972 billion in 2024 an increase of 257 million dinars. This improvement reflects more efficient tax collection, particularly in sales tax, which grew and helped offset a decline in income tax revenues caused by slower economic activity. The increase in domestic revenues helped stabilize fiscal performance and improved the self-reliance ratio measured as domestic revenues to current spending from 84.9 per cent to 87.6 per cent.
Spending growth remained contained. Current expenditures increased by 6.3 per cent to reach 7.069 billion dinars, while capital expenditures rose by 13.5 per cent to 725.6 million dinars. This shift toward productive spending indicates a focus on supporting growth rather than expanding operational costs. However, there is still a need for greater transparency regarding how these funds were allocated and which sectors benefited. Since investment inflows do not fully cover capital expenditures, borrowing becomes an economic necessity, provided it is managed prudently and directed toward projects that enhance long-term growth.
Diversifying debt instruments is another essential aspect of sound fiscal management. Jordan has made progress in this area by repaying Eurobond maturities through concessional financing from friendly countries and issuing Islamic Sukuk to utilize excess liquidity in Islamic banks, providing lower-cost financing alternatives. These measures enhance debt sustainability and improve the government’s capacity to manage its financial obligations efficiently.
Taken together, recent fiscal data reveal several encouraging trends. Current spending remains under control, rising modestly by around 6 per cent, which reflects fiscal discipline. Economic growth is showing signs of improvement, with GDP expanding by 2.7 per cent in the first quarter and 2.8 per cent in the second quarter, supported by policy measures that boosted revenues and narrowed the deficit. Debt management practices are also becoming more diversified, helping to reduce borrowing costs and strengthen fiscal efficiency. If this approach continues, it could gradually reduce the public debt-to-GDP ratio, even if temporary increases occur in the short term.
Public debt, therefore, is not inherently problematic. What matters most is how it is used. When guided by sound principles and a clear strategy focused on growth and sustainability, borrowing can serve as a powerful tool for development and economic resilience. The real concern lies not in the size of the debt, but in the absence of transparency, strategy, and purpose. Borrowing should always serve defined economic objectives supporting growth, improving efficiency, and ensuring fiscal sustainability.
The crucial distinction is between those who borrow to invest in productive capacity and those who borrow merely to cover current expenses and service existing debt. A comprehensive understanding of public debt must take into account growth, efficiency, and sustainability as interconnected factors. Numbers alone are not sufficient; what truly matters are the underlying questions: how is the debt managed? Does it contribute to development? Does it safeguard fiscal stability?
Jordan’s fiscal debate should move beyond asking “Who borrows more?” to addressing “How effectively is borrowing used?”—because effectiveness, not volume, is what determines the real economic impact of public debt.
Public debt remains a persistent challenge for Jordan’s economy. Yet when managed wisely, it is also a vital instrument for maintaining fiscal stability and financing development priorities. Effective debt management rests on three main pillars: controlling current spending, stimulating economic growth to boost revenues, and diversifying debt instruments by replacing high-interest borrowing with lower-cost alternatives. Together, these measures should form the foundation of a coherent debt management strategy aimed at ensuring long-term fiscal and economic sustainability.
During the first eight months of 2025, Jordan’s public debt rose by 2.688 billion dinars, sparking debate between those who see borrowing as necessary to meet financing needs and those who view it as a source of concern. To interpret this properly, the increase must be understood in the broader context of the country’s fiscal performance. Total government spending during this period reached 7.795 billion dinars, equivalent to 31 per cent of GDP, with an average monthly expenditure of 974.4 million dinars. Domestic revenues amounted to 6.194 billion dinars, or 24 per cent of GDP, averaging 774.3 million dinars per month. This created a monthly fiscal deficit of about 200 million dinars, totaling 1.6 billion dinars over the period, or roughly 6.4 per cent of GDP, amid a steep 61.9 per cent decline in foreign grants to just 30.2 million dinars.
Despite the fall in grants, domestic revenues showed improvement, rising to 6.194 billion dinars from 5.972 billion in 2024 an increase of 257 million dinars. This improvement reflects more efficient tax collection, particularly in sales tax, which grew and helped offset a decline in income tax revenues caused by slower economic activity. The increase in domestic revenues helped stabilize fiscal performance and improved the self-reliance ratio measured as domestic revenues to current spending from 84.9 per cent to 87.6 per cent.
Spending growth remained contained. Current expenditures increased by 6.3 per cent to reach 7.069 billion dinars, while capital expenditures rose by 13.5 per cent to 725.6 million dinars. This shift toward productive spending indicates a focus on supporting growth rather than expanding operational costs. However, there is still a need for greater transparency regarding how these funds were allocated and which sectors benefited. Since investment inflows do not fully cover capital expenditures, borrowing becomes an economic necessity, provided it is managed prudently and directed toward projects that enhance long-term growth.
Diversifying debt instruments is another essential aspect of sound fiscal management. Jordan has made progress in this area by repaying Eurobond maturities through concessional financing from friendly countries and issuing Islamic Sukuk to utilize excess liquidity in Islamic banks, providing lower-cost financing alternatives. These measures enhance debt sustainability and improve the government’s capacity to manage its financial obligations efficiently.
Taken together, recent fiscal data reveal several encouraging trends. Current spending remains under control, rising modestly by around 6 per cent, which reflects fiscal discipline. Economic growth is showing signs of improvement, with GDP expanding by 2.7 per cent in the first quarter and 2.8 per cent in the second quarter, supported by policy measures that boosted revenues and narrowed the deficit. Debt management practices are also becoming more diversified, helping to reduce borrowing costs and strengthen fiscal efficiency. If this approach continues, it could gradually reduce the public debt-to-GDP ratio, even if temporary increases occur in the short term.
Public debt, therefore, is not inherently problematic. What matters most is how it is used. When guided by sound principles and a clear strategy focused on growth and sustainability, borrowing can serve as a powerful tool for development and economic resilience. The real concern lies not in the size of the debt, but in the absence of transparency, strategy, and purpose. Borrowing should always serve defined economic objectives supporting growth, improving efficiency, and ensuring fiscal sustainability.
The crucial distinction is between those who borrow to invest in productive capacity and those who borrow merely to cover current expenses and service existing debt. A comprehensive understanding of public debt must take into account growth, efficiency, and sustainability as interconnected factors. Numbers alone are not sufficient; what truly matters are the underlying questions: how is the debt managed? Does it contribute to development? Does it safeguard fiscal stability?
Jordan’s fiscal debate should move beyond asking “Who borrows more?” to addressing “How effectively is borrowing used?”—because effectiveness, not volume, is what determines the real economic impact of public debt.
comments