AMMAN
— With the end of
COVID-19 in sight, the prospect of economic recovery in
Jordan appears to be temporary halted by an unprecedented increase in consumer
products prices.
اضافة اعلان
According
to a paper issued by the Jordanian Economic Forum in April, the average increase
in prices was approximately 13 percent. Consumer purchasing power in the
country is already weakened as a result of the economic repercussions of the
pandemic, and with the current price hike, the country is on the verge of
entering an even worse economic crisis.
Chairman
of Amman Chamber of Commerce, Khalil Haj Tawfiq, pinpoints that the decline in
economic activity is unprecedented in the country’s history. He views the
massive increase in prices across multiple industries as a failure in
government policy.
“The
step towards economic reform in the country should come directly from the
government. Prices are increased even further because of the incredibly high
custom taxes,” said Tawfiq in an interview with Jordan News.
“Government
officials should invite industry leaders and discuss a comprehensive plan where
custom taxes are gradually dropped so that producers are able to lower prices
and accommodate the financial capabilities of consumers,” he added.
He
also believes Jordan should reconsider its termination of the free trade
agreement with Turkey.
“Prices
are at an all-time high, and it might be necessary for Jordan to entertain the
prospect of rebuilding its trade relationship with Turkey to bring cheaper
products to the country.”
If
the situation persists, Jordanians could be looking at yet another factor of
economic difficulty. A hike in the prices of commodities could see families
struggling to make ends meet and to provide basic necessities to their families
at a time when unemployment stand around 24 percent as announced by the government,
and 50 percent among the youth, according to the World Bank.
The
price hikes can be mainly be attributed to the massive disruption that took
place in the global supply chain, which once again is a consequence of COVID-19,
according to an Earnest and Young study. Ocean carrier shipping prices went through the roof, increasing 50
percent from their pre-pandemic levels, according to Bloomberg.
Jordan,
a country that is highly dependent on imported goods, felt the shockwave of
this increase in the global cost of production across many of its sectors. For
example, in the past week, the price of one kilogram of chicken skyrocketed
from 1.19JDs to 2.08JDS, a 74.7 percent increase, local reports have said.
The
economic consequence can be felt on both sides, the consumer, and the producer.
A writer for a local news outlet who makes around JD400 per month, expressed
her worry over the increase in the price of basic commodities.
She
explains how her family has already suffered financially from government
lockdowns and restrictions on the economy. They barely survived postponement in
salary payments and decline of economic activity. Rice, and other commodities
that are increasing in price, formulate an integral part of their consumer
basket, a situation that brings a great deal of distress to the family.
On
the flipside, a local plastic producer, explains how the lack of liquidity in
the country, coupled with the increase in prices, makes it almost impossible
for him to meet his sales obligations and breakeven.
“The
prices of raw materials are already increasing globally, and they are subject
to hefty custom taxes upon entry. We have no option but to increase our prices,
and in a market where consumer purchasing power is continuously declining, our
businesses and livelihood are in great jeopardy,” he said.
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