The Jordanian cabinet approved an austerity package that includes plans to raise taxes on banks and mining firms, but avoids controversial fuel and electricity price rises, to hold down the rise in the budget deficit, officials said yesterday.
They said the first package of measures, approved at a cabinet meeting late on Saturday, also included cuts in the government’s operational spending and a freeze on hiring, and were expected to produce savings of around 300 million dinars (US$423 million).
The state news agency Petra said the government would amend the income tax law to increase the taxes on profitable banks and on mining firms such as Arab Potash and Jordan Phosphate Mines Co, among the world’s leading producers of fertilizers.
Officials said privately that the next step would be a rise in electricity and premium gasoline prices, which the government said earlier this month was needed to stop the budget deficit from exceeding US$4 billion this year and further damaging the kingdom’s growth prospects.
Successive governments have adopted an expansionist fiscal policy characterized by sizable state subsidies and salary increases in response to months of protests that began early last year, inspired by the uprisings that swept the Arab world.
In the latest sign of popular discontent, Islamist and tribal opposition groups held street protests against rising prices on Friday.
To head off greater unrest, the authorities created new state jobs in an already bloated public sector, froze gasoline prices and maintained subsidies for bread.
Officials say the new measures were needed to get IMF approval for further financing by donors worried about the impact of extra social spending on Jordan’s fiscal and monetary stability.
Jordanian Finance Minister Suleiman al-Hafez was quoted last week as saying the planned price rises and higher taxes were crucial to avoid the budget deficit soaring to 2.03 billion dinars (US$2.8 billion) — after taking account of foreign aid that traditionally covers budget shortfalls.
The budget deficit could have reached a record 2.93 billion dinars if foreign aid fell and the new measures were not adopted, he said.
Last year the economy was kept afloat by a US$1.4 billion cash injection from Saudi Arabia, but officials say there was no pledge of support from Saudi Arabia this year, raising concerns about the budget.
This year’s budget had set a much lower deficit target of 1.027 billion dinars, 4.6 percent of GDP, after allowing for extra foreign aid and the streamlining of a subsidies package that costs over 2.3 billion dinars a year.
Officials say the government plans to impose a sales tax on a long list of luxury goods, and will not touch subsidies on bread for the poor and on cooking gas that a majority of the country’s 7 million low-income people depend on.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS