Jordan delays public sector pay hikes to ease financial pressure
Similar to many other countries, in Jordan the COVID-19 crisis has followed a tight lockdown and has led to a steep fall in economic activity. It will further slash growth projections and deepen an economic downturn in the debt-dependent economy. To ease the financial pressure Jordan has decided to delay pay hikes in the public sector.
These hikes were part of 9.8 billion (S$20 billion) 2020 budget, which included some of the biggest salary hikes for civil servants and military personnel in years. The government was expected to save at least half a billion dinars (S$996.2 million) on salaries and pensions, which make up the bulk of state expenditure in the 2020 budget, officials say. But now the government will delay the pay increases earmarked in the country's 2020 budget until the end of the year.
Al Ississ, however, denied that the government was considering a revision of the budget to accommodate extra spending needs for millions of dinars of extra social spending to cushion the country's poor whose income has suffered.
As per the original plan for, the pay hikes covered 700,000 state employees including army personnel, despite the move increasing spending at a time of rising public debt in order to stave off social instability. But with the crisis it is unlikely the country would meet this year's deficit target of 2.3 per cent of GDP nor maintain an IMF growth forecast of 2.1 per cent for 2020. However, Finance Minister Mohammad Al Ississ remains optimistic to an extent, and despite the strain on government finances, he shares that the kingdom is committed to paying its local and foreign debt payments, including bond maturities on time.
Governments across countries face difficult choices, on one hand they have to save lives and take care of the well-being of people, on the other hand, they have to ensure that the economy doesn’t suffer much. Countries are trying to manage the situation with relief packages, compensations and schemes.
In Singapore, the government has announced a S$48 billion "Resilience Budget" to support hard-hit businesses and employees in the city-state. In a parliamentary address, Deputy Prime Minister and Finance Minister Heng Swee Keat said that this massive package is intended to "save jobs, support workers, and protect livelihoods". The government has also dedicated over S$16 billion to keep people employed and ensure they have income during the pandemic downturn. Japan has announced a package of measures worth about $4 billion in spending to manage the fallout to the economy due to COVID-19. In Canada, more than a million people signed up for unemployment benefits around mid of March. The government has announced a package of C$52 billion. Prime Minister Justin Trudeau said that the aid package will give people affected by the outbreak C$2,000 a month and delay student loan repayments, among other measures to boost the economy.