Jordan’s inflation highest since 2018, but economy is on the mend

An aerial view of Amman. (File photo: Ameer Khalifeh/Jordan News)
AMMAN — Fitch Solutions, a subsidiary of Fitch Ratings, said Jordan’s inflation reached the highest rate since 2018, but asserted that the economy is on the mend,  Al-Mamlaka TV reported. اضافة اعلان

Fitch Solutions, one of America’s top three credit rating agencies based in New York, lowered its previous expectations for Jordan’s GDP in 2022 from 2.7 percent to 2.5 percent. It said the figure reflected the rising cost of living amid a continued hike in commodity prices globally.

It reiterated its view that Jordan’s economy will improve, in comparison with 2021, when the whole year’s growth stood at 2.2 percent.

On Jordan’s inflation, based on the Consumer Price Index, data indicated that inflation rose from 3.6 percent on an annual basis in April 2022 to 4.4 percent on an annual basis in May.

It is the fastest growing rate since November 2018, driven by high food, transport, utilities, and housing components in Jordan’s consumer prices index, Fitch solutions said.

On the other hand, Jordan’s economy grew by 2.5 percent in the first quarter of 2022 on an annual basis, supported by strong consumption rates as well as a fixed gross capital consumption.

The reason for the downward revision of Jordanian GDP growth is mainly due to the risks often related to higher global food and energy prices, which may weaken consumer confidence and household consumption in 2022.

The credit-rating agency reiterated its expectations that the main contribution to Jordan’s 2022 GDP will be from the increased household consumption. It also said that data points to improved economic activity this year, partly from a projected rise in tourism and fertilizer revenues.

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