(MENAFN- Amman Net) While the government is betting on controlling spending and accelerating the implementation of major projects under the economic modernization program, experts believe the 2026 budget will serve as a true test of the state's ability to balance economic growth demands with increasing financial and social pressures.

As the government continues its efforts to reduce the deficit and enhance domestic revenues, calls are growing to transform the budget from a mere numerical management tool into a comprehensive productive and developmental plan that addresses living challenges and creates new job opportunities.

Recently, Prime Minister Dr. Jafar Hassan issued Directive No. (14) for 2025 regarding the preparation of the draft general budget law and the draft system for the formation of ministries, departments, and governmental units for the 2026 fiscal year.

This step aligns with the government's plan to submit the budget to the House of Representatives before the end of next month, aiming for its approval before the end of the current year for the first time. This would allow the implementation of new capital projects to begin at the start of next year.

The total budget is expected to exceed JD 12 billion, with the financial deficit likely remaining around JD 2 billion. Meanwhile, the government aspires to increase domestic revenues by improving tax collection and expanding the productive base.

Chronic Deficit and Growing Needs for Growth

Economist Dr. Qassem Al-Hamouri from Yarmouk University says the general budget reflects the state's economic priorities, determining spending and revenue allocations, and revealing the government's capacity to balance financing and production.

Al-Hamouri points out that Jordan still suffers from a chronic financial deficit due to ongoing expenditures exceeding revenues, making true fiscal sustainability difficult without restructuring spending.

He adds that the high unemployment rate, which has surpassed 21%, requires the government to focus on capital expenditures and direct them toward productive projects capable of creating jobs, particularly in agriculture, industry, and tourism. He emphasizes that this approach is a national duty before being a financial choice.

Al-Hamouri stresses the importance of enhancing transparency and accountability in deficit financing, noting that while the estimated deficit is around JD 2 billion annually, the government often borrows much more than that.

He says:“If borrowing is used as a financing tool, it should be limited to covering the actual deficit only,” highlighting the importance of keeping citizens informed about spending details and funding sources.

A Traditional Budget for an Economy Needing Renewal

Despite expectations of economic growth ranging between 2.9% and 3% over the coming years, Al-Hamouri believes that budget preparation in Jordan still follows a traditional approach, without fully considering current economic challenges or labor market needs.

He points to the continued reliance on indirect taxes such as sales tax, fuel tax, and customs duties, rather than advancing genuine tax reforms based on fairness and an expanded productive base.

He notes that major infrastructure projects, such as the National Water Carrier project, are significant steps but need to be linked with renewable energy initiatives and sustainable national funding. He proposes establishing a national sovereign fund to allow citizens and institutions to contribute to financing such projects.

Al-Hamouri adds that the successful implementation of these projects transparently and free from corruption could pave the way for other national initiatives, such as an internal railway line or a new airport in northern Jordan to facilitate exports and ease pressure on Queen Alia International Airport.

He expresses concern over the absence of salary increases for public employees, military personnel, and retirees in the upcoming budget, warning that this would negatively affect citizens' purchasing power and keep markets stagnant, especially amid weak domestic demand and the closure of many commercial outlets.

He explains that the government approaches the budget with a narrow accounting mindset, viewing salary increases as deficit-amplifying, whereas controlled increases could positively impact growth and tax revenues.

Regarding the expansion of the social protection umbrella and the student support fund, Al-Hamouri notes the impact remains limited, pointing out that allocations do not always reach their intended beneficiaries, as was the case with university support taxes. He calls for stricter oversight mechanisms to ensure fairness in distributing aid.

Government-Parliament Coordination: A Key to Economic Performance

Former Finance Minister Dr. Mohammad Abu Hammour believes the nature of the relationship between the government and parliament will directly affect national economic performance during the current legislative session.

He explains that the government has a clear agenda for economic modernization and administrative development, including executive measures and major projects requiring financing and supportive legislation, making coordination with parliament vital.

Abu Hammour notes that certain economic laws, such as the general budget law, are central at this stage, as the constitution requires the government to submit them before the start of December, allowing parliament sufficient time to study and discuss them before approval.

He affirms that the new economic legislation directly impacts citizens' lives-both investors and workers-and includes areas such as trade, property ownership, and land ownership regulations.

However, he warns that any law affecting citizens' livelihoods or incomes will spark extensive parliamentary debate, requiring the government to remain flexible and capable of explaining its objectives to build public support.

He adds that while the government has carefully studied draft laws through competent authorities, parliament has the power to amend, add, or delete provisions, necessitating government readiness to respond to potential changes.

Abu Hammour sees this flexibility as essential to maintaining legislative and economic stability, particularly regarding infrastructure and economic development projects included in the general budget, calling for ready alternatives in case of significant amendments.

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