AMMAN — The
rise in the Consumer Price Index (CPI) in Jordan is one of the direct repercussions
of COVID-19, which resulted in a dramatic surge in international freight rates,
experts said on Monday.
اضافة اعلان
According to
a report by the Department of Statistics, the CPI increased by 1.25 percent in
the first 11 months of 2021 to reach 102.36, compared to a CPI of 101.10 for
the same period in 2020.
The CPI is a
measure that examines the average prices of a number of consumer goods and
services, such as transportation, food, and medical care.
Prices worldwide
have increased due to the unprecedented hike in international shipping rates, Chairman
of the Jordan Chamber of Commerce (JCC) Nael Kabariti told
Jordan News, on Monday.
The rates of shipping containers from China have
jumped from $2000 to $12,000, according to Kabariti.
He said that
in some countries, prices have gone much higher than in Jordan, with many
countries struggling to provide essential goods to consumers.
Economist
Mazen Irsheid said that crude oil prices had recorded a large increase since
the beginning of this year.
Given that
Jordan imports 94 percent of its oil needs, the price increase will reflect all
commodities, directly and indirectly, Irsheid explained.
In addition,
global prices of foodstuff have recorded the biggest hike in ten years,
according to Irsheid. He warned of an expected shrink in the purchasing power
if the inflation rate continues to rise.
Muflih Aqel,
a banker, expected the CPI to continue to rise over the coming years as a
result of the so-far unresolved global freight prices and raw material issues,
both of which have disrupted the supply chain.
When
countries lifted lockdowns, there was an immediate rise in demand for raw
materials, leading to the increase in freight prices, Aqel said.
This jump in
the CPI will lead countries to increase interest rates in order to control
inflation, Aqel said.
Irsheid
called on the government to reconsider custom taxes to encourage local
production and eventually make Jordan less prone to international price
fluctuations.
He also
urged the authorities to focus on green economy solutions while decreasing
taxes on EV’s and hybrid vehicles.
Irsheid said
that Jordanian people should reconsider their consumption
patterns and rearrange their needs according to their incomes.
Such
projects would contribute to reducing the oil bill and enhance Jordan’s role in
combating climate change.
On the other
hand, Kabariti said that the General Budget for 2022, discussed on Monday at
the Lower House, should focus on increasing funds to support the economy and
reducing taxes on commodities to boost consumers' purchasing power.
He called
for increasing capital expenditure for job-generating projects that would decrease
unemployment.
Irsheid said
that the General Budget should support local industries by regulating imports
and creating mega projects that are sustainable and provide permanent jobs.
During a
press conference on Sunday, Finance Minister Mohammed Al-Ississ stressed that
the government is committed not to raise taxes in the 2022 budget, adding that
the policy of combating tax and customs evasion has enabled the government to
continue not to impose any new taxes.
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