Raad Mahmoud Al-Tal

The public finance indicators through the end of June 2026 present a generally positive picture of the government’s fiscal performance. They show the government’s ability to maintain fiscal and monetary stability despite a challenging regional and economic environment. Several indicators are particularly encouraging, including the continued strength of domestic revenues, higher capital expenditure, the broadly stable public debt-to-GDP ratio, stronger foreign reserves, and continued growth in banking activity.

Total revenues and grants during the first half of 2026 reached approximately JD 4.84 billion, of which JD 4.72 billion were domestic revenues and JD 115.1 million were foreign grants. Domestic revenues therefore accounted for around 97.6 per cent of total revenues and grants during the period. This is an important indicator of the central role played by domestic resources in financing public expenditure and of the government’s capacity to rely primarily on its own revenue base.

Domestic revenues amounted to approximately 21.6 per cent of GDP, while total revenues and grants represented 22.1 per cent of GDP. At the same time, total expenditure reached approximately JD at f 6.11 billion, equivalent to 27.9 per cent of GDP. These figures indicate that public expenditure continues to be managed within a framework consistent with the size of the Jordanian economy.

The composition of expenditure is particularly important. Capital expenditure reached approximately JD561.5 million during the first half of 2026, equivalent to 2.6 per cent of GDP. Current expenditure, meanwhile, stood at approximately JD5.55 billion. The continued allocation of significant resources to capital expenditure is encouraging because productive public investment can contribute to improving infrastructure, expanding productive capacity, supporting private-sector activity and strengthening economic growth.

Current expenditure, which represents the largest component of total expenditure, reflects the government’s continued ability to meet its essential obligations and maintain public services. The key challenge going forward is therefore not simply to reduce current expenditure, but to improve its efficiency and ensure that every dinar of public spending generates the greatest possible economic and social return.

The fiscal deficit remains an important element of the overall picture. The deficit including grants reached approximately JD 1.273 billion, while the deficit excluding grants stood at around JD 1.388 billion. Although the deficit remains a challenge, its significance should be assessed within the broader framework of fiscal management and the government’s ability to finance essential expenditure while maintaining overall financial stability.

One of the most encouraging indicators is the relative stability of the public debt-to-GDP ratio. Public debt, excluding debt held by the Social Security Investment Fund, reached approximately JD 37.69 billion at the end of June 2026, compared with JD 36.56 billion in 2025. This represents an increase of approximately JD 1.13 billion, or 3.1 per cent.

More importantly, the debt-to-GDP ratio increased only marginally, from 83.5 per cent to 83.6 per cent. This suggests that economic growth has broadly kept pace with the increase in the nominal value of public debt. From a fiscal sustainability perspective, this is an important distinction. The sustainability of public debt should not be assessed solely by its nominal value, but also by its relationship to the size of the economy and the government’s capacity to generate income and revenues.

The structure of public debt also remains an important consideration. External public debt stood at approximately JD 20.64 billion, while domestic public debt reached around JD 17.06 billion. Maintaining an appropriate balance between different sources of financing, while continuing to reduce borrowing costs, extend maturities and manage refinancing risks, will remain important for fiscal sustainability.

The external position of the economy provides another positive signal. Gross foreign reserves, including gold and Special Drawing Rights, increased to approximately $ 26.09 billion by the end of June 2026, compared with $ 25.50 billion in 2025. This represents an increase of approximately $ 585 million, or 2.3 per cent. Strong foreign reserves provide an important buffer against external shocks and support monetary and exchange-rate stability.

Foreign reserves also covered approximately 8.6 months of imports, providing Jordan with a substantial external liquidity buffer and reinforcing confidence in the country’s ability to meet its external obligations.

The banking sector also continued to show stable activity. Broad money grew by 3.7 per cent, deposits increased by 2.2 per cent, and credit facilities extended by licensed banks increased by 3 per cent. At the same time, the weighted average interest rate on loans and advances declined from 7.95 per cent to 7.48 per cent, while the weighted average interest rate on time deposits declined from 5.22 per cent to 4.94 per cent. Lower lending rates can support private-sector financing, investment and economic activity, provided that credit continues to be directed toward productive sectors.

The indicators for the first half of 2026 suggest that the government has succeeded in maintaining fiscal and monetary stability while strengthening several aspects of the economic position. Domestic revenues remain the main source of public resources, the debt-to-GDP ratio remains broadly stable, foreign reserves have increased, interest rates have declined, and bank credit continues to expand at a moderate pace.