Cairo Amman Bank Research Flash Comment: Jordan's Fiscal Stance Improves As fiscal Deficit Narrows To JD 206 Million

Jordan’s fiscal deficit narrowed by 55% in the first five months of 2014 compared to the same period of 2013, to reach JD 206 million for the January-May period.
The JD 254 million decrease in the budget deficit was a result of a JD 594 million increase in total revenues and grants which offset a JD 340 million increase in total expenditure.
Domestic revenues increased in the first five months of 2014 by 26% compared to the same period of 2013, increasing by JD 537 million. The higher revenue offset the increase in current expenditures, which grew by 12% or JD 301 million.
Capital expenditures increased by around 14% funded by GCC infrastructure grants.
The budget balance data seem to be in line with the official forecasts for the 2014 budget, as the fiscal deficit including grants is expected to narrow compared to the previous year, to a deficit of 4.3% of GDP.
Nevertheless, it is better to remain cautious seeing that it is the norm for the budget balance to do well in the first few months of the year, and then deteriorate towards the end of the year.
Meanwhile, public debt reached JD 19.9 billion in May, compared to JD 19.1 billion at the end of 2013, increasing by JD 824 million; public debt reached 78% of 2014 GDP.