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August 15 2022 4:09 AM ˚
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Jordan inflation is expected to continue climbing

inflation
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AMMAN — Jordan’s inflation will continue to rise amid expectations of impending increases in food and transportation costs caused by the war in Ukraine, Fitch Solutions said.اضافة اعلان

A research arm of Fitch Ratings, one of America’s leading credit rating agencies, Fitch Solutions said it expects the country’s average inflation to rise from 2.9percent to 3.6percent this year. Inflation stood at 3.6percent last April.

The research body indicated that the new energy tariff in Jordan, which entered into force on April 1 led to an increase in electricity and fuel prices by 26.7percent on a monthly basis. It did not explain where the figure came from.

But it said although the new tariff is designed to reduce costs for nearly 90percent of the subscribers, the lower subscription numbers, due to the complexities surrounding the new digital registration process, mean that up to 40percent of Jordanian households incur higher costs. It said it expected the number to remain high in the coming months.

Economic expert Yusuf Mansur told Jordan News that inflation was “due to the fact that the number of imports constitute 55percent of the gross domestic product, 87percent of the calories consumed by each citizen are imported, and 90percent of the energy is imported.”

“The government is the biggest beneficiary of inflation,” he asserted.

He said he believed that inflation will not last long, explaining that the main causes of inflation are disruption of supply chains, high prices and production ceased in factories.

Economist Zyan Al-Zawaneh told Jordan News that global and local inflation indicators have become clear, as Jordan’s imports constitute 90percent to 95percent, and that inflation rates will witness a gradual rise.

“Until this moment, the government is responsible for the monetary policy and the economy, but it hands off approach towards the inflation crisis,” he said.

Zawaneh called for forming a permanent committee, “as we may face a coming shock that may last for months.”

“We are approaching a hot summer, but we do want to enter an explosive summer,” he said. “So, we must distribute the load, especially in issues which affect Jordanian lives and security.”

He said the government must face the internal and the external shock related to inflation and develop effective solutions. “This is its role, but until this moment, it has remained neutral and has not done anything,” he maintained.

He emphasized that the upcoming inflation will “lead us to a stage of high prices and low demand for months.”

Economic expert Mufleh Al-Aqel told Jordan news that the whole world suffers from inflation and this fact was represented by a sharp rise in the prices of foodstuffs, especially wheat, which rose by 60percent. He said that the price of one tonne of wheat jumped to $452, up from $320.

He said he expected inflation to reach to 65percent.

Aqel explained that people’s purchasing power will weaken further, bringing down demand. But he added that the envisaged increases in oil derivatives will significantly contribute to raising the inflation.


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