The Impact of the General Budget Deficit on the Increase of Public Debt: A Case Study of Jordan for the Period 2006-2016

Authors

Mohammad Abu Khadija, The World Islamic Sciences and Education University - JordanFollow
Nazim Al-Shammari, Al-Khaled Center for Economic Studies and Consultations - JordanFollow

DOI

https://doi.org/10.35192/jjoas-h.v22i2.9

Abstract

This study aimed to identify the effect of the public budget deficit on Jordan's public debt. The research was conducted for the period from 2006 to 2016 to understand the size and nature of the budget deficit's impact on public debt in Jordan. The study reached several conclusions, the most significant of which was the existence of a significant effect of the budget deficit on the increase in public debt, attributed to the inability of revenues to cover expenditures. Additionally, the study found an adverse yet significant effect of the budget deficit, in the presence of the controlling variable (external subsidies), on decreasing public debt; specifically, an increase in external subsidies contributed to a reduction in the budget deficit. In conclusion, the study recommended that the government should reduce its current expenditures and invest external subsidies in income-generating projects to diversify its revenue sources. It also emphasized the importance of working toward reducing current expenses to decrease the budget deficit.

Recommended Citation

Abu Khadija, Mohammad and Al-Shammari, Nazim (2020) "The Impact of the General Budget Deficit on the Increase of Public Debt: A Case Study of Jordan for the Period 2006-2016," Jordan Journal of Applied Science-Humanities Series: Vol. 22: Iss. 2, Article 9.
DOI: https://doi.org/10.35192/jjoas-h.v22i2.9
Available at: https://digitalcommons.aaru.edu.jo/jjoas-h/vol22/iss2/9