US embassy cable - 04AMMAN4275

UNCLAS SECTION 01 OF 02 AMMAN 004275 
 
SIPDIS 
 
DEPT PASS USAID 
 
E.O 12958: N/A 
TAGS: EFIN, ECON, JO 
SUBJECT:  Jordan's Public Debt:  Government Continues to Make Progres 
 
 
1.Summary: According to a Ministry of Finance quarterly bulletin on 
Jordan's total public debt at end of March 2004 stood at $9.84 billio 
GDP for 2004, down from a figure as high as 111% in 1999. Of the tota 
76%, $7.47 billion, consists of foreign obligations. Foreign debt ser 
was $241 million, of which $197.3 million was for principal payments. 
 
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Foreign vs. domestic debt 
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2.According to this new bulletin, Jordan's total public debt stands 
million ($9.84 billion). Of this total, JD 5.296 billion ($7.47 billi 
obligations (76% of the total), and JD 1.68 billion ($2.37) is for do 
(24%). Loan guarantees are 2.3% of the total public debt, and are inc 
c 
obligations numbers. As a percentage of GDP, total public debt is 92. 
GDP for 2004; it was 101.5% and 100.5% for 2003 and 2002, respectivel 
as high as 111% in 1999.  (Comment: The GDP figure used in the debt/G 
estimate for 2004.  It assumes that Jordan continues to follow its pr 
schedule, including privatizing the electricity generation company. 
 
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Debt Servicing 
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3.Foreign debt servicing for Q1 2004 was JD170.8 million ($241 milli 
JD139.9 million ($197.3) was for payments toward principal and JD30.9 
million) was for interest payments.  Fortunately for Jordan, 56.1% of 
obligations are at fixed interest rates. 
 
Of the public debt: 
-- 56% is at fixed interest rates; 
-- 37.6% is subject to 2% or lower interest rates; 
-- 30% is subject to 2-4% interest rates; 
-- 19.8% is subject to 4-6% interest rates; and 
-- 12.6% is subject to interest rates higher than 6%. 
 
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Maturity 
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4.As of March 31, 2004, maturities of public debt were: 
: 
-- 46.6% at 20 years or longer; 
-- 42.5% within 15-20 years; 
-- 10.5% within 5-15 years; and 
-- 0.4% within 5 years 
 
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Breakdown by currency 
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5.As of March 31, 2004, obligations of public debt by currency were: 
-- 28.9% in US Dollars; 
-- 22.6% in Japanese yen; 
-- 19.9% in Euros; 
-- 10.2% in Kuwaiti Dinars; 
-- 8.2% in Pounds Sterling; 
-- 3.7% in other currencies; and 
-- 6.4% in SDRs. 
 
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Breakdown by source 
--------------------------- 
 
6.As of March 31, 2004, obligations of public debt by source were: 
-- 31.1% to industrial countries  Non-Official Development Assistant 
-- 30.3% to industrial countries  Official Development Assistant loa 
-- 31.3 % to multilateral institutions; 
-- 5.5% to Arab funds; and 
-- 1.8% to other sources. 
 
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Domestic Debt 
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7.As of March 31, 2004, obligations of domestic debt were in the fol 
instruments: 
-- 42.2% in T-Bonds; 
-- 28.9% in T-Bills; 
lls; 
-- 16.2% as Central Bank extraordinary advances; 
-- 6.8% from banking and non-banking sources; and 
-- 5.1% development bonds. 
 
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Comment 
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8.The local Arabic daily Al-Arab Al-Yawm quoted the Prime Minister o 
asserting that Jordan would repay its debt obligations by the end of 
contacted by ECON FSN, officials at the Prime Minister's office said 
had been misquoted and what he had actually said was that Jordan woul 
its debt by 2007 as required under its commitments to lenders. 
 
9.         Jordan's improving debt situation is another indication of 
Jordanian economy.  With trade booming, growth estimates being revise 
inflation staying under control, Jordan is enjoying the results of ea 
continued firm control over government expenditures and improved tax 
End Comment. 
 
10.Note:  The new quarterly on debt is in addition to the Ministry's 
bulletin. Both are available on the Ministry's website: www.mof.gov.j 
 
GNEHM 
M