High inflation rate at 4.6 per cent during the first five months of this year and 5.3 per cent in 2010 is burdening Jordanian households.
As inflation is expected to go up due to the increase of prices on the international level coupled with harmful domestic practices, middle and even high class housewives charge that prices in Jordan have become more expensive than in other world countries.
Sixty per cent of the inflation is caused by the increase of prices on the international level, especially of fuel and food items, while the remaining 40 per cent is the result of adverse domestic practices, according to economist Yusuf Mansur.
He explained that domestic monopoly practices and government duties, including different taxes and customs, levied on goods are the main factors behind the inflation.
Also, collusive practices between some importers and traders contribute to price increases, he said, noting that it is not easy to track down such suspected collusive price-hiking practices.
“Definitely, the purchase value of the Jordanian dinar is decreasing,” Jordanian banker A. Bushnaq said on Monday estimating the drop at around 20 per cent compared to five years ago.
More people now opt to buy gold and real estate instead of holding on to banknotes, he noted.
“In light of increasing prices, people are not spending as they used to,” he added. “The mindset of Jordanians has changed. They try to spend less through prioritising their purchases.”
“Even at big supermarkets, you do not see trolleys filled with goods as in the past,” he told The Jordan Times.
Bushnaq indicated that because Jordan is stable there are investments and there is economic growth, but on the consumer level, the situation is bad.
Prices have gone up as a result of the global financial crisis, the political regional turmoil, coupled with the high demand on goods, he stated.
According to a February report by the National Inflation Association, the decline of the US dollar helped export America’s inflation to the rest of the world, mainly North Africa and Middle East region.
As prices continue to rise, workers in both the public and private sector have become increasingly vocal in demanding higher salaries. This has become evident throughout the demonstrations held across the Kingdom through the past weeks.
At a vegetable market, Salwa Haddad said although she can find few food items sold at reduced prices, main items, such as cooking oil, are expensive and one can’t do without them.
Money no longer has any value, another housewife commented after she withdrew her last JD100 of savings from the bank.
“Last year, I could buy a whole lamb with this money but now I can’t buy half of it,” she remarked.