Survey finds ‘consumer sentiment’ bleak, forecasts further decline

(File photo: Ameer Khalifeh/Jordan News)
AMMAN — The Jordan Consumer Sentiment Index, a quarterly national survey by Ipsos Jordan, showed a decline between the first and second quarters of this year.اضافة اعلان

According to the survey, approximately seven out of ten Jordanians have a negative view of the current economic situation in Jordan, due to fear of unemployment and inflation.

Experts in the trade and financial sector interviewed by Jordan News contended that the decline was expected in view of the difficult economic situation Jordan, like the rest of the world is going through because of the COVID-19 pandemic and its economic repercussions, and political crises, including the Russian war on Ukraine, which resulted in a significant global increase in prices.

Executive Director of the Consumer Protection Society Maher Al-Hajjat told Jordan News that the society conducted four surveys of Jordanian consumers between 2017 and 2019 and “the results of all four studies indicated that the economic conditions are expected to get worse in the coming years, especially with regard to job opportunities, investment, general productivity, and general living conditions”.

He added: “Our studies have proved that the economic situation is still bad as a result of the lack of job opportunities, high prices of materials as a result of global conditions and the COVID-19 pandemic, and the failure to create new opportunities and attract new investments.”

According to Hajjat, what is required is to change the current approach by focusing on both economic and social dimensions, and not adopt “just an economic approach” that gives free rein to “a certain category of traders”, an allusion to monopoly practices.

President of the Jordan Chamber of Commerce Nael Kabariti told Jordan News that “the drop in consumer sentiment does not apply to Jordan only as a separate case, but to the whole world”.

He explained that “there are global concerns about what is to come from an economic point of view, especially in view of the high inflation rates, scarce liquidity and high interest rates”.

“All these factors have led to mistrust and lack of clarity regarding the future, due, particularly, to the food security crisis and political tensions globally,” he added.

Kabariti stressed that Jordan is part of the world, and “what is happening in neighboring or distant countries, in terms of crises and wars, affects us directly”.

Economist Mohammad Al-Basheer told Jordan News that “the global sentiment index declined due to the rise in commodity prices, which coincided with the erosion of incomes”.

He said that this is reflected in all countries, “but the situation in Jordan is more difficult, in light of the challenges we are facing, including corruption and unemployment, which affect directly our economy”.

He stressed that the evidence portends more difficult conditions in the coming periods, “especially if things remain as they are now, and prices of strategic commodities, especially those related to oil and food, continue to rise”.

Economist Husam Ayesh told Jordan News that “this index expresses the citizens’ reading of the current situation and its impact on them, and is linked, in the first place, to regional and global influences and trends of the global economy.”

“When the current data is reflected in the form of an indicator that measures the reaction of Jordanian citizens, it will certainly mean that the citizen will tend to reserve his spending for fear of upcoming problems, in addition to reducing the demand for bank loans and reducing purchases,” he warned.

Ayesh emphasized that “the concerned commercial sectors are supposed to study the costs they incur and thus determine reasonable prices, with a small profit margin, that consumers find suitable. This will lead to the revitalization of the economy, and will have a positive impact on the economic performance” in the country.

A reason consumers seem to fear the future, he said, are the outside circumstances, which inevitably affect Jordan.

“One of the most prominent challenges is the fact that the volume of imports is more than two and a half times the volume of exports,” Ayesh said, adding that “this means that we will remain hostage to the changes that are happening in the world.

The consequence, he stressed, is this “negative view and fear of the future”.

According to Ayesh, “the government has to take this index, and other indicators, seriously, to study them in depth, together with the private sector and various other concerned parties, and perhaps come up with a plan that will help alter the negative perception of the consumer”.

Jordan’s consumer confidence index is ranked 22nd globally among Ipsos countries where the consumer confidence index is surveyed.

The consumer confidence index is a key indicator of consumption trends in the domestic market, and although it is a subsequent indicator of the economy’s movement, the rise in consumer confidence predicts a rise in consumer mobility and an increase in the demand for finance and investment, including the acceleration of economic growth.

Industry, retail, banking, and government sectors globally rely on reading the changes in this index and incorporating its results into economic and investment decision making.

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