CAIRO: Jordan's Prime Minister Fayez al-Tarawneh said on Sunday that his government planned price rises soon for essentials to prevent a spiraling budget deficit from passing $4 billion this year and further damaging the kingdom's economy. “There is a need for speedy measures to assure regional institutions and international donors that we are doing our part to put our house in order financially and economically,” Tarawneh was quoted by the state news agency as saying. Finance Minister Suleiman al-Hafez was also quoted as saying the planned price hikes, that would include higher taxes on luxury goods were crucial to avoid the budget deficit soaring to 2.03 billion dinars ($2.8 billion) after foreign aid that traditionally covers budget shortfalls. “This step is so late, our economy is suffering long time ago, due to hefty subsidies for oil prices in kingdom, this step will enhance our ability to cut deficits in our budget” a macro- economic expert in Amman, told Bikyamasr.com by email. Experts said Jordan's ability to continue to maintain a costly subsidy system and the upkeep of a vast state bureaucracy was increasingly untenable in the absence of large foreign capital inflows or infusions of foreign aid, which put their economy on threshold of falling.
