Saudi Arabia Grants $400 Million to Support Jordanian Economy

Saudi Arabia granted $400 million to support Jordan’s economy and ease its budget deficit, the Jordanian state-run news agency Petra said, citing Finance Minister Mohamed Abu Hammour.

The grant will help to finance a number of projects “which will reflect positively on the level and the quality of services provided to citizens and will help overcome the difficulties faced by the public budget,” the Jordanian minister was quoted as saying.

Jordan, one of the smallest economies in the Middle East, imports more than 90 percent of its oil and relies on foreign investment and grants to support its budget and current-account deficits. Political turmoil that has engulfed the Middle East in recent months led to unrest in Jordan by opposition groups seeking faster social and political change.

The Jordanian government increased public salaries and subsidies in January, adding 460 million dinars ($649 million) to this year’s budget, to counter protests over falling living standards.

The International Monetary Fund expects Jordan’s economy to grow 3.3 percent this year, Petra said May 26, citing Paul Cashin, head of the IMF mission in the kingdom. The government forecast growth of as much as 6 percent before the outbreak of pro-democracy protests in Jordan this year.

Inflation quickened to an annual 4.5 percent in April from 4.3 percent the month before, the Department of Statistics said May 9. Public debt increased to 4.617 billion dinars as of the end of March from 4.610 billion dinars at the end of 2010, according to the Finance Ministry website.

-With assistance from Mohammad Tayseer in Amman. Editors: Heather Langan, Andrew Atkinson

To contact the reporter on this story: Nayla Razzouk in Amman at nrazzouk2@bloomberg.net.

To contact the editor responsible for this story: Inal Ersan at iersan@bloomberg.net.

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