During the second half of 2023, Treasury revenues began to decline noticeably due to the repercussions of the war in Gaza and lower revenues from the tobacco and vehicle sectors, driven by the growing use of alternative tobacco products and the increasing adoption of electric vehicles.

 

Despite these clear warning signs, the 2024 Budget Law was prepared without proactive measures to offset the decline in revenues.

 

This ultimately resulted in a gap of nearly JD 900 million between projected and actual revenues a shortfall whose effects continue to weigh on Jordan’s fiscal reform efforts to this day.

 

Now, as preparations begin for the 2027 Budget Law, the need to learn from the lessons of the 2024 budget has become even more urgent.

 

The coming year is expected to bring additional fiscal challenges that require proactive risk assessment rather than relying on conventional revenue and expenditure estimates.

 

The government will face a dual challenge: maintaining revenue growth while controlling expenditures, all while continuing to implement the Economic Modernization Vision, expanding capital spending, and meeting new financial commitments.

 

The most significant of these are the proposed salary increases for public sector employees and pensioners, estimated to cost around JD 250 million, in addition to approximately JD 150 million allocated for new initiatives and capital projects.

 

Together, these commitments will place an additional fiscal burden of nearly JD 400 million.

 

Government projections for continued economic growth are also subject to external risks that cannot be ignored. Ongoing regional tensions could affect tourism, trade, transportation, and investment, ultimately impacting revenues from sales tax, income tax, and customs duties.