Rising domestic proceeds and falling current and capital spending, coupled with higher foreign grants, helped Jordan’s state budget record a JOD165mn ($233mn) surplus in January-April, reversing a JOD308mn deficit the year before, preliminary data from the finance ministry showed.

The reading is good news for the government seeking to rebalance its budget parameters, which if coupled with narrowing CA gap on lower imports, will boost Jordan’s creditworthiness in the near to medium term.

Jordan’s 2015 state budget forecasts a JOD688mn net deficit after foreign grants. The expected budget gap will equal to 2.5% of the forecast GDP in 2015.

Excluding grants, the budget reported a JOD82mn deficit at end-April, narrowing from a JOD529mn gap a year earlier. Foreign grants increased to JOD247mn at end-April from JOD221mn the year before.

Total budget revenue climbed 13% y/y to JOD2.42bn at end-April whereas spending fell 8% y/y to JOD2.26bn. Domestic budget income grew also 13% y/y to 2.173bn over the period reflecting better tax collection and strong local and tourism demand that is boosting services income, customs duties and VAT proceeds. Tax on goods and services grew 2.8% y/y and those on international trade edged up 0.1%. Income tax climbed 13.5% y/y in the first four months of the year.

Current spending dropped 6.1% y/y to JOD2.08bn (94% of the total) at end-April while capital spending plunged 26% y/y to just JOD174mn.