The issue of the cost of public debt is considered one of the most complex and burdensome files for the state’s public finances, as it is not limited to the digital aspects only, but also extends beyond them to the economic and financial repercussions that this cost has, as well as to how the debt is managed and the mechanisms for dealing with it.

The cost and size of debt also always impose the necessity of reconsidering every debt in terms of its management method, its time frame, its conditions, and the possible cost that both the economy and the citizen bear together.

From here, the government’s orientations towards the sustainability of public debt and reducing its cost – that is, preserving the ability to bear the debt in the present and in the future without facing difficulties in repaying it that may lead to economic crises – and linking the level of borrowing and interest rates to the growth of the economy and its revenues, allowing the repayment of debts without imposing large burdens on the budget or the citizen, can be read as confirmation of the approach to smart management of debt and its repercussions.

This is clearly expressed by the government’s issuance of Eurobonds worth one billion dollars for a period of seven years at an interest rate of 5.75% instead of 7.5%, which reflects efforts aimed at reducing the cost of debt and enhancing its sustainability.

The government has succeeded in reducing the cost of borrowing by 1.75 percentage points, which means an annual saving of approximately $17.5 million (about 12.4 million Jordanian dinars), which reflects new financial thinking that seeks to manage debt with prudence and financial responsibility that expresses new policies based on discipline and sustainability.

It is true that the size of the savings is not large compared to a budget exceeding 12 billion dinars, or a debt service exceeding 2 billion dinars annually.

However, what matters here is the shift in government financial philosophy.

The government has begun to think about how to manage the cost of debt and reduce its burdens instead of expanding its size. This in itself is a reform approach that reflects awareness of the importance of the sustainability of public finances.

The real return from this positive thinking is not measured only by the amount of financial savings, but rather by its practical significance and the confidence it instills in international markets, and by the message it sends to investors that Jordan is moving towards more efficient, disciplined and intelligent financial management.

Every step towards reducing the cost of financing means reducing pressure on the budget, expanding the area of ​​spending on development sectors, and improving the image of the national economy before international institutions.

This new policy marks the beginning of a shift from borrowing to cover deficits to borrowing for efficiency and sustainability, which is the essence of the financial reform we are all seeking.

Most importantly, this issuance witnessed investment demand exceeding 300% of the offering value, which means that the demand for Jordanian bonds exceeded the supply by three times, which confirms international investors’ confidence in the Jordanian economy and in the state’s financial management, at a time when the region is going through difficult economic and political conditions.

These steps, even if they seem small, receive appreciation and attention from the Finance Committee in the House of Representatives, provided that they are followed by similar steps in other files, on the way to transforming them into a permanent government approach.

Borrowing in itself is not a mistake if it is calculated, managed intelligently, and serves a value-added economic process, but what is wrong is for borrowing to remain a financing method without a corresponding reform in expenditures and revenues.

What the government has done today is a correct step in the sound financial direction that deserves encouragement and support. We hope that it will be an introduction to a comprehensive financial policy aimed at gradually reducing the cost of debt, which will reflect positively on improving the Kingdom’s credit rating.

Perhaps the value of the savings achieved from reducing interest does not change much in the overall picture, as estimates of the total debt interest in the 2026 budget are about 2.260 billion dinars.

But the idea expressed by this approach carries within it a message of change in the method and logic of thinking.

What we need today is this kind of thinking:
To look into the details – even if they are small – because they are what make the difference.
And in financial decisions that open the door to greater confidence, because they create value,

On the path to a more stable economy and a public debt that is managed with reason, not reaction.