AMMAN — Official figures released on Tuesday show that the
Consumer Price Index (CPI), a measure of inflation, rose by 2.62 percent in the first four months of
2022, to 104.58 points, compared to 101.91 points in the same period last year.
اضافة اعلان
Economists interviewed by
Jordan News said that the
increase was expected, especially in light of the significant spike in the
prices of foodstuffs and goods brought about by the war in Ukraine, income insecurity,
the pandemic, and the global economic slowdown.
They also agreed that the recent rise in inflation
is caused mainly by external factors, which is expected to continue to go up in
the coming months.
Former banker
Mufleh Aqel told
Jordan News that a
2.6 percent rise is not huge, indicating that it “may reach 4 to 5 percent
before the end of this year, especially that in strong economies like the US
and a number of European states, the inflation rate has reached 7 percent so
far.”
“This is imported inflation, especially since the
prices of foreign goods are rising,” he said, adding that “there is no tool to
control imported inflation”.
We import wheat, barley and oil, and thus the possibility of controlling inflation is difficult
“Inflation occurs when there is an increase in the
prices of goods and a decrease in the purchasing power of the local currency,
which affects aggregate demand, especially in the absence of a wage increase,
and which will place a greater burden on those with limited incomes; it will
also turn middle-income to low-income earners,” Aqel added.
He cautioned that it is difficult to find solutions
to the rise in inflation, especially in a country that relies heavily on
imports. “We import wheat, barley and oil, and thus the possibility of
controlling inflation is difficult,” he said.
Economist
Hussam Ayesh told
Jordan News that the
inflation rate is still within safe limits, but the fear is that it will
continue to rise.
Ayesh said that “the high rate of inflation may
exceed government expectations, especially since the government excludes from
its calculations commodities whose prices fluctuate constantly, including
foodstuff and energy”.
He stressed the importance of having statistical
data that shows the extent of the rise in inflation when calculating the prices
of all commodities.
According to Ayesh,
inflation rates might continue to rise or remain at high levels in the coming
months, stressing that “demand for goods did not return to its normal levels
before the onset of the
COVID-19 pandemic” and expressing hope that “the
government has plans to confront upcoming price increases”.
Economist
Wajdi Makhamreh told
Jordan News that “the
rise in the inflation rate in Jordan was expected in light of the global spike
in prices due to the Russian-Ukrainian war”.
“Prices rose sharply due in large part to the jump
in the price of oil derivatives, which are now the highest in the Arab world,”
Makhamreh said.
“In the month of April, the inflation rate reached
3.59 percent, which is one of the highest rates Jordan has witnessed in several
years,” he added.
Economist
Mazen Irshaid told
Jordan News that “the
repercussions of the increase in inflation rate will be reflected on all
economic sectors, in addition to individuals, companies, and the national
economy itself”.
“The purchasing power will weaken more and companies
will have to raise their prices to maintain their profit margins,” he said.
Irshaid said that the
Central Bank of Jordan will be
obliged to raise interest rates in the future in order to protect the Jordanian
currency from losing more of its purchasing power.
“However, this step has disadvantages, especially on
companies that depend on borrowing from banks. With the increase in interest
rates, financing costs will rise. The same applies to consumers and citizens,
and this leads to more erosion in the purchasing power,” he said.
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