Budget 2027: What Do We Want?

The government has entered the preparation phase for the 2027 budget, facing a test that goes beyond simply controlling revenues and expenditures.

It will also have to demonstrate its ability to reduce the deficit and stimulate growth at the same time, without introducing new taxes or cutting capital spending and essential services.

According to preliminary estimates, public revenues in 2027 are expected to reach approximately JOD 11.352 billion, compared with total expenditures of JOD 13.361 billion. This would result in a deficit after grants of around JOD 2.009 billion, equivalent to 4.1% of GDP.

The more difficult objective is to reduce the primary deficit from an estimated JOD 600 million in 2026 to JOD 264 million in 2027. Achieving this reduction would require increasing domestic revenues from JOD 10.196 billion to JOD 10.757 billion, while simultaneously controlling expenditure growth.

This equation requires realistic measures, not merely optimistic projections.

Fiscal performance results through the end of April 2026 provide an indication worth examining.

Domestic revenues stood at approximately JOD 3.308 billion, while current expenditures increased by 8.4%, compared with only 1.9% growth in capital spending. Meanwhile, the budget deficit after grants widened to JOD 693 million, compared with around JOD 469 million during the same period last year.

These indicators raise a direct question: How will the government be able to cut the primary deficit by more than half in a single year if current spending continues to grow at a faster pace than revenues?

The problem is not only the size of spending, but also its composition. Preliminary estimates for 2027 put current expenditures at JOD 11.719 billion, compared with only JOD 1.643 billion in capital spending. Interest payments are also expected to reach JOD 2.340 billion, exceeding total capital expenditure by approximately JOD 697 million.

This means that for every dinar allocated by the budget to capital projects, around JOD 1.42 will be spent on interest payments.

This highlights the extent to which debt servicing is consuming fiscal space and limiting the government’s ability to finance water, transport, energy, infrastructure and digital transformation projects.

Meanwhile, increasing the salaries of civil and military employees and retirees earning less than JOD 600 by JOD 30 would have a direct social impact and could contribute to supporting domestic consumption. However, its overall financial impact would remain clearly limited.

On the revenue side, improving the fiscal position should not be synonymous with raising taxes.

A more sustainable alternative would be to broaden the tax base, integrate informal economic activities, combat tax evasion and avoidance, and link government databases.

This would improve collection efficiency without placing additional burdens on compliant taxpayers.

The success of the 2027 budget should not be measured simply by whether the deficit declines, but by how that reduction is achieved.

If the deficit is reduced at the expense of capital spending, the budget will not have solved the problem; rather, it will have shifted its cost onto economic growth and employment opportunities.

However, if the reduction is achieved through controlling current expenditures, improving revenue collection efficiency and accelerating project implementation, the budget will have succeeded in combining fiscal discipline with economic development.