Amman, Oct. 26 (Petra) – A government source said that recent claims portraying the government of Prime Minister Jafar Hassan as the most borrowing in Jordan’s history are factually inaccurate, noting that Ministry of Finance data show a JD2.7 billion uptick in public debt during the first eight months of this year, bringing the total outstanding debt to JD46.8 billion.
According to the source, a substantive reading of the data indicates that roughly two-thirds of this increase about JD1.5 billion, or 58 percent stems from debt-servicing costs on the accumulated stock of domestic and external liabilities. The remainder reflects the settlement of legacy obligations, including over JD100 million in outstanding arrears and tax refund payments carried over from prior fiscal years. He emphasized that, under the IMF’s fiscal assessment methodology, interest payments are excluded from the computation of the primary balance, which provides a more accurate gauge of fiscal stance.
The remaining JD1.1 billion includes a JD212 million preemptive borrowing executed under concessional terms, aimed at locking in favorable interest rates and providing liquidity to partially redeem Eurobond maturities due in January 2026, totaling around JD710 million. The source noted that net deficit financing amounted to roughly JD900 million, part of which was directed toward capital expenditures, describing this composition as fiscally constructive and growth-supportive over the long term.
He reaffirmed that the government remains fully aligned with the 2025 General Budget Law, which projects a central government deficit of JD2.3 billion, in addition to a combined shortfall of about JD820 million for both the National Electric Power Company (NEPCO) and the Water Authority.
The source underscored that the government has introduced a strategic shift in public debt management, prioritizing cost optimization, liability sustainability, and diversification of funding instruments. This new approach enabled the Treasury to reduce the cost of servicing Eurobonds maturing in mid-2025 by 40 percent, resulting in annual fiscal savings of approximately USD 40 million. The debt reprofiling was achieved through a blend of concessional financing and low-yield Islamic sukuk, leveraging ample Islamic banking liquidity and enhanced cooperation with Arab and international financial institutions.
He pointed to the staff-level agreement concluded with the International Monetary Fund (IMF) in October 2025 under both the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), which reaffirmed Jordan’s commitment to a downward debt trajectory through measured fiscal consolidation while preserving priority social and development spending. The IMF, he noted, expressed confidence in the sustainability of Jordan’s debt profile and the government’s repayment capacity, asserting that the debt level remains fully serviceable within the medium-term fiscal framework.
The source reiterated that the government is on track to reduce the debt-to-GDP ratio to 80 percent by 2028, a target he described as both credible and sustainable, and consistent with Jordan’s macroeconomic adjustment path.
He added that any assessment of the government’s fiscal performance should be considered in the context of broader macroeconomic indicators, which have outperformed expectations amid a series of 162 targeted policy measures designed to stimulate investment and sustain growth momentum.
Jordan’s real GDP expanded by 2.8 percent in the second quarter of 2025, marking the strongest growth since the onset of the Gaza conflict, underpinned by a 7.5 percent surge in tourism receipts, an 8 percent rise in merchandise exports, and a 36.6 percent jump in foreign direct investment inflows during the first half of the year. Meanwhile, the Central Bank’s foreign reserves reached an all-time high of USD 24 billion, underscoring the resilience of the macroeconomic framework and the efficacy of the government’s fiscal and monetary coordination.
//Petra// AA
