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Beyond the Annual Budget
objectives included improved fiscal discipline through realistic revenue projections, followed by better expenditure prioritization and the identification of fiscal space. The PFM reform strategy is part of the National Agenda, a document outlining Jordan’s development strategy, based on a participatory approach by all stakeholders and endorsed by the highest levels of government and therefore benefiting from consensual support.
Design The MTEF is a three-year rolling framework. The ceilings for years two and three are indicative and are used as a base for the following year’s budget. It covers all spending agencies at the level of detail of account segments. It coexists with the Executive Program, a three-year program that translates the National Agenda into priorities and programs, including costing and phasing, and is coordinated by the Ministry of Planning. The MTEF has not been extended to local governments. There is flexibility in the MTEF, with adjustments made during the year according to provisions of the annual General Budget Law at the level of items, projects, activities, or programs. Changes in the MTEF during the year can occur through a transfer made within a spending agency or through a supplementary budget. A contingency reserve in the MoF chapter of the budget can be used at the discretion of the Council of Ministers. The unused part of the budget at the end of the year is returned to the treasury. When the MTEF is rolled over, it uses the latest withinyear changes as a base.
Implementation The MTEF is prepared by the General Budget Department of the MoF. Earlier, spending agencies are required to prepare their forward estimates. This involves estimating expenditure requirements on approved programs and projects for the next three years (so-called unchanged policy forward estimates) and the costs of proposed new initiatives and projects to be started during the coming three years. Following finalization of the MTFF’s aggregate resource envelope, the General Budget Department compares the unchanged policy forward estimates with the aggregate resource envelope. This indicates the scope for spending on new initiatives or projects without cutting existing spending or, alternatively, the magnitude of spending cuts needed to avoid exceeding the aggregate resource envelope. This information becomes the basis for preparing the MTEF.