The government borrows, but it also repays its debts. This is the essence of the 2026 financing budget.

 

The net increase in public debt is the difference between the funds borrowed to meet financing needs and the amounts used to repay debts. The financing budget cannot be understood by looking only at the borrowing side - its uses are equally critical and serve as the true measure of the government’s financial performance.

 

Under the 2026 financing budget, total borrowing during the year will reach JD7.1 billion. These funds will cover debt repayments, interest, and installments. In addition, the government will finance a financial deficit of JD2.1 billion, settle the Water Authority’s deficit and dues of JD330 million, and repay installments on government arrears, financial leasing, and Islamic sukuk totaling JD285 million.

 

Projected revenues for 2026 estimated at JD10.9 billion, while expenditures are put at JD13.1 billion, leaving a budget deficit of jd2.1 billion, which will be financed through the financing budget.

 

In short, the financing budget reflects the government’s plan to meet both internal and external obligations efficiently. The debt balance for next year will not rise by the total size of the financing budget but only by the new borrowing needed to cover deficits. At around JD2.6 billion, this increase is in line with previous years and lower than the level expected for 2025.

 

It is worth noting that 58 per cent of the debt increase, about JD1.5 billion, represents interest payments on accumulated internal and external debt from past years. The remainder covers settling obligations including arrears exceeding JD100 million and tax refunds from previous periods.

 

This reminds us of this year’s figures and of the way net debt is calculated as it actually is, not as some observers might prefer. Especially since 58 per cent of the increase in debt, around JD1.5 billion, represents interest payments on the accumulated internal and external public debt from past years, in addition to settling financial obligations including arrears exceeding JD100 million, as well as tax refunds the government paid for previous periods.

 

The remaining JD1.1 billion of debt growth includes JD212 million from a low-interest concessional loan, temporarily increasing the debt balance. These funds will help repay part of the Eurobond maturing in January 2026, around JD710 million. This means the government effectively borrows only JD900 million to cover the deficit.

 

A strategic shift in debt management has focused on cost, sustainability, and innovative solutions. This approach reduced the cost of servicing Eurobonds maturing in June 2025 by 40 per cent, saving the state around $40 million annually.

 

The government borrows—this is true, and it is not new - but it borrows wisely, repays efficiently, and times its repayments carefully. This strategy has led to upgraded credit ratings for Jordan, stable lending sources, and lower interest costs than in many other countries.