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AMMAN, April 8 (Reuters) - Jordan’s state finances will be deeply hurt by a loss of revenue caused by the impact of the novel coronavirus on its economy but the aid-dependant kingdom will be able to repay its foreign debt obligations, the finance minister said.

Mohammed Al Ississ said on state television that the government’s 2020 budget priorities would also be affected by a steep fall in economic activity as a result of a lockdown ordered to stem the spread of the virus.

“As far as international and domestic (debt) obligations on Jordan and bonds, we have made all the arrangements to honour them when they become due,” Al Ississ said.

The kingdom hopes it will secure extra lending from Western donors under a four-year $1.3 billion reform programme it secured last month that would mitigate some of the adverse impact of the crisis.

The IMF obliges the kingdom to proceed with structural reforms and fiscal consolidation to reduce a $42 billion public debt, equivalent to 97% of gross domestic product that has spiralled in the last decade by employment in a bloated public sector.

The crisis will not however prompt the country to scale down public spending in its 9.8 billion dinars ($14 billion) budget for 2020, Al Ississ said

“We won’t reduce spending because decreasing at this time will only accelerate the economic slowdown,” Al Ississ said.

The government had planned this year to boost capital spending and adopt an expansionist policy to revive domestic consumption and investments.

But budget priorities would change with a focus on more social spending to ease hardships among low-income Jordanians.

The kingdom, which imports almost all its energy needs, hopes however to capitalise on a drop in oil prices to reduce a 2 billion dinars ($2.8 billion) annual bill, Al Ississ said.

The kingdom’s economy has suffered since it closed its borders nearly a month ago, followed by a tight lockdown that has shuttered businesses and paralysed public life.

Officials say the crisis has made it unlikely the country would meet this year’s deficit target of 2.3% of GDP.

The crisis has dashed hopes the country would see a turnaround in an economy that has seen sluggish growth in the last few years, hurt by high unemployment and regional conflict.

Jordan’s central bank governor, Ziad Fariz, said this week it was too early to say to what extent an IMF growth forecast at 2.1 percent for 2020 was now in doubt.

The central bank has taken a series of measures to ease the impact of the coronavirus crisis, from reducing interest rates to delaying debt payments and prodding banks to lend to troubled firms.

$1=0.7090 dinars