PM: Inflation under control, economy on upward trajectory

[03-12-2022 02:37 PM]

Ammon News - Prime Minister Bisher Khasawneh said that, despite major economic challenges, Jordan's inflation rate remained within the 4-percent range, far below that of Europe or the United States, for instance.

In a wide ranging interview with Jordan Television’s "60 Minutes" talk Show, the prime minister said the fact the Kingdom managed to keep inflation under manageable thresholds similar to those seen in rich countries "is a source of pride".

"We now have a comprehensive reform and modernization project for the Jordanian state, which aims to improve many dynamics and the quality of life. There are signs that the Jordanian economy began to recover, such as a 43 percent increase in exports from the previous year," Khasawneh said.

The tourism sector's revenue "exceeded expectations and beat the target of JD2.9 billion," the prime minister continued. "We have surpassed this target and are on the verge of achieving the figure recorded in the baseline year, which we consider to be 2019," he said.

Khasawneh noted that foreign capital is pouring into the Kingdom, citing major Emirati projects in Aqaba and a hospital-medical university project in collaboration with the Saudi Public Investment Fund Company.

The prime minister disclosed that an Arab sovereign fund is seriously considering the construction of a railway connecting Aqaba and the Madouneh region to the east of Amman, and that the government is currently awaiting a response from the fund before deciding whether to move forward with the project or offer it as a public investment opportunity.

Regarding the International Monetary Fund's fifth review of the national economy's performance, the Prime Minister stated, "It was not easy, but it succeeded," emphasizing that the Kingdom's IMF-sponsored reform program is built on solid foundations and clear-cut targets aimed at curbing tax avoidance and evasion and maximizing public revenues.

He added that the program's primary objective is to back Jordan's effort to carry out structural reforms that the Kingdom sees as essential to achieving self-sufficiency.

According to the prime minister, the rising costs of staple foods in the wake of the Russo-Ukrainian conflict and the Jordanian government's plan to keep a strategic stock of wheat for more than a year and a half, and barley for more than ten months, posed the greatest challenge in the country's fifth IMF review.

However, as the Prime Minister pointed out, the government made a strategic decision last April to keep buying wheat and barley to maintain the strategic stock, despite the fact that doing so resulted in a higher bill due to the $517 price tag attached to a ton of wheat. He said additional purchases amounted to JD500 million.

After the fifth review was completed, Jordan's credit rating was set at "B1," with a future outlook that shifted from "stable" to "positive", According to the Prime Minister.

These high ratings, he added, are evidence that Jordan's economy is being managed with care and prudence, and that reforms are being taken seriously to safeguard the country's citizens and future generations from the greater dangers that would result from adopting "populist" policies.

Khasawneh said the national currency is strong and stable, and that the exchange rate of the dinar has never been in doubt because of the sound financial policies implemented by the Ministry of Finance and the Central Bank.

Asked about a proposed new city project, the prime minister said that it had actually been initiated in 2017 under the government of former prime minister Hani Mulki, but had since fallen off the priority list due to multiple reasons, including the Covid-19 pandemic.

However, the project is now back on the table, and that a consulting firm had submitted preliminary feasibility studies to the cabinet a few weeks ago, adding that it would most likely be launched in 2025, with the first phase completed by 2033 and the second by 2050, accommodating 1 million people.

Khasawneh emphasized that "this ambitious project" seeks to establish a city within the boundaries of the Capital Governorate and will neither be a new nor alternative capital. It will be approximately 40 kilometers from the center of Amman, 27 kilometers from Queen Alia International Airport and 32 kilometers from Zarqa, he noted.

While acknowledging that the tax burden in the Kingdom is slightly high, the Prime Minister said "the current state of public finances does not allow for any [tax] reviews." He indicated that his government has no plans to increase current or introduce new taxes.

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