Ammon News : The 2026 budget reflects a clear commitment to fiscal discipline and efficient public spending, yet it also reveals persistent structural challenges that continue to hinder Jordan’s path toward inclusive growth. With a total value of about 12.8 billion dinars, the budget was drafted under cautious economic assumptions and realistic projections for growth and deficit—making it more a budget of financial stability than one of economic expansion.

The government expects real GDP growth of around 2.9%, supported by moderate improvements in domestic revenue collection and continued efficiency in tax administration. The fiscal policy remains balanced—aiming to reduce the deficit while maintaining social and service spending at sustainable levels.

In terms of structure, total expenditures are distributed between 11.2 billion dinars in current spending and 1.6 billion dinars in capital spending, with a pre-grant deficit estimated at 2.125 billion dinars, or roughly 4.6% of GDP. Meanwhile, the financing budget amounts to about 13 billion dinars, including 9.3 billion dinars for the repayment of domestic and external debt, 2.1 billion dinars to cover the deficit, and additional borrowing for debt refinancing and new issuances.

This distribution indicates that most financing is directed toward managing public debt rather than stimulating productive economic activity. Moreover, the government’s reliance on domestic borrowing—especially through banks and the Social Security Investment Fund—reflects an effort to minimize external exposure and borrowing costs.

The budget demonstrates several strengths worth noting:

1. It maintains macroeconomic stability despite a volatile regional environment and reaffirms the government’s commitment to the public debt ceiling and ongoing fiscal reform without cutting essential social spending.
2. It shows consistency between fiscal and monetary policies, channeling borrowing mainly toward debt restructuring rather than expanding new borrowing.
3. A significant portion of capital expenditures is directed to priority national projects, including those aligned with the Economic Modernization Vision, which account for nearly one-quarter of total capital allocations. This suggests a link between development spending and long-term structural reform goals.
4. The composition of revenues shows gradual improvement in domestic revenue generation alongside reduced dependence on foreign grants, signaling a gradual shift toward self-reliance as a strategic direction.
5. About 65% of capital spending in 2026 targets the completion of ongoing projects, while 35% is allocated to new ones. This reflects a disciplined fiscal stance focused on completing priority projects and avoiding arrears, but it also limits the introduction of new, high-impact initiatives capable of accelerating growth and job creation.

However, the budget still carries several weaknesses:

1. The dominance of current (operational) expenditures—which exceed 87% of total spending—remains a chronic structural issue, restricting the government’s ability to allocate more resources toward investment and development.
2. Despite extensive government field visits across the governorates in 2025, capital allocations for governorates remain nearly unchanged in the 2026 budget, raising questions about the translation of those visits into tangible fiscal action supporting local development.
3. The government plans to borrow about 9.6 billion dinars domestically to service existing debt obligations, which may crowd out the private sector from access to financing—particularly when much of this borrowing depends on the Social Security Investment Fund rather than external sources.
4. The public-private partnership (PPP) framework remains weak despite the inclusion of around 1.4 billion dinars in the budget appendices for potential PPP projects. These allocations are not yet part of the official budget envelope, leaving the PPP agenda largely conceptual rather than operational.
5. The budget still lacks a comprehensive mechanism linking public spending to measurable economic outcomes. Even with fiscal control and better revenue efficiency, there is no systematic approach to assess the developmental return on each dinar spent. Thus, the budget remains more of a financial accounting document than a national investment plan driving sustainable development across governorates.

Beyond these points, the 2026 budget also overlooks several strategic priorities for long-term growth. First, it does not outline a clear policy to strengthen export-oriented productive sectors such as agriculture, industry, transport, and tourism—despite marginal increases in their allocations. Second, it allocates insufficient funding to digital transformation and knowledge economy programs, which are critical for innovation and future employment. Third, there is no explicit focus on green economy or renewable energy investments, despite their rising global importance as sustainable financing channels. Finally, the absence of a robust impact evaluation framework for capital projects makes it difficult to measure their true economic or social effectiveness.

In conclusion, the 2026 budget continues Jordan’s path of fiscal caution and debt management discipline, but it does not yet represent a breakthrough toward comprehensive development. While it succeeds in preserving short-term stability, the next step must be to translate this stability into tangible growth by expanding the productive base, empowering the private sector, and aligning the budget more closely with the Economic Modernization Vision. Only then can Jordan transition from managing resources to managing sustainable development—a transformation both the economy and citizens eagerly await.

Ammon News : The 2026 budget reflects a clear commitment to fiscal discipline and efficient public spending, yet it also reveals persistent structural challenges that continue to hinder Jordan’s path toward inclusive growth. With a total value of about 12.8 billion dinars, the budget was drafted under cautious economic assumptions and realistic projections for growth and deficit—making it more a budget of financial stability than one of economic expansion.

The government expects real GDP growth of around 2.9%, supported by moderate improvements in domestic revenue collection and continued efficiency in tax administration. The fiscal policy remains balanced—aiming to reduce the deficit while maintaining social and service spending at sustainable levels.

In terms of structure, total expenditures are distributed between 11.2 billion dinars in current spending and 1.6 billion dinars in capital spending, with a pre-grant deficit estimated at 2.125 billion dinars, or roughly 4.6% of GDP. Meanwhile, the financing budget amounts to about 13 billion dinars, including 9.3 billion dinars for the repayment of domestic and external debt, 2.1 billion dinars to cover the deficit, and additional borrowing for debt refinancing and new issuances.

This distribution indicates that most financing is directed toward managing public debt rather than stimulating productive economic activity. Moreover, the government’s reliance on domestic borrowing—especially through banks and the Social Security Investment Fund—reflects an effort to minimize external exposure and borrowing costs.

The budget demonstrates several strengths worth noting:

1. It maintains macroeconomic stability despite a volatile regional environment and reaffirms the government’s commitment to the public debt ceiling and ongoing fiscal reform without cutting essential social spending.
2. It shows consistency between fiscal and monetary policies, channeling borrowing mainly toward debt restructuring rather than expanding new borrowing.
3. A significant portion of capital expenditures is directed to priority national projects, including those aligned with the Economic Modernization Vision, which account for nearly one-quarter of total capital allocations. This suggests a link between development spending and long-term structural reform goals.
4. The composition of revenues shows gradual improvement in domestic revenue generation alongside reduced dependence on foreign grants, signaling a gradual shift toward self-reliance as a strategic direction.
5. About 65% of capital spending in 2026 targets the completion of ongoing projects, while 35% is allocated to new ones. This reflects a disciplined fiscal stance focused on completing priority projects and avoiding arrears, but it also limits the introduction of new, high-impact initiatives capable of accelerating growth and job creation.

However, the budget still carries several weaknesses:

1. The dominance of current (operational) expenditures—which exceed 87% of total spending—remains a chronic structural issue, restricting the government’s ability to allocate more resources toward investment and development.
2. Despite extensive government field visits across the governorates in 2025, capital allocations for governorates remain nearly unchanged in the 2026 budget, raising questions about the translation of those visits into tangible fiscal action supporting local development.
3. The government plans to borrow about 9.6 billion dinars domestically to service existing debt obligations, which may crowd out the private sector from access to financing—particularly when much of this borrowing depends on the Social Security Investment Fund rather than external sources.
4. The public-private partnership (PPP) framework remains weak despite the inclusion of around 1.4 billion dinars in the budget appendices for potential PPP projects. These allocations are not yet part of the official budget envelope, leaving the PPP agenda largely conceptual rather than operational.
5. The budget still lacks a comprehensive mechanism linking public spending to measurable economic outcomes. Even with fiscal control and better revenue efficiency, there is no systematic approach to assess the developmental return on each dinar spent. Thus, the budget remains more of a financial accounting document than a national investment plan driving sustainable development across governorates.

Beyond these points, the 2026 budget also overlooks several strategic priorities for long-term growth. First, it does not outline a clear policy to strengthen export-oriented productive sectors such as agriculture, industry, transport, and tourism—despite marginal increases in their allocations. Second, it allocates insufficient funding to digital transformation and knowledge economy programs, which are critical for innovation and future employment. Third, there is no explicit focus on green economy or renewable energy investments, despite their rising global importance as sustainable financing channels. Finally, the absence of a robust impact evaluation framework for capital projects makes it difficult to measure their true economic or social effectiveness.

In conclusion, the 2026 budget continues Jordan’s path of fiscal caution and debt management discipline, but it does not yet represent a breakthrough toward comprehensive development. While it succeeds in preserving short-term stability, the next step must be to translate this stability into tangible growth by expanding the productive base, empowering the private sector, and aligning the budget more closely with the Economic Modernization Vision. Only then can Jordan transition from managing resources to managing sustainable development—a transformation both the economy and citizens eagerly await.

http://en.ammonnews.net/article/86517