Sustainability of Public Debt in Jordan

Abstract

The study aims to analyze the public debt in Jordan, and measuring its sustainability, using annual data for the period (1980-2018). Two methods have been used to measure the public debt sustainability in Jordan, in order to give decision-makers a pilot pointer in directing the fiscal policy in Jordan. The first method it designed to estimate long term elasticities of public expenditure and public revenue, while the second method, to compare between the real interest rate on public debt and the growth rate of real Gross Domestic Product. The study concluded that there is a possibility to sustain the public debt in Jordan. Where according to the first method, both elasticities are equal, and the growth rate of real Gross Domestic Product is greater than the real interest rate on public debt following the second method.