Low-income consumers feel pinch of inflation

AMMAN —  Despite an inflation rate of 2.45 per cent for the first eight months of 2023, economists argue that consumers perceive a much higher inflation rate.

The Department of Statistics (DoS) released its monthly report on the General Consumer Price Index for August 2023, revealing an increase of 0.88 per cent compared with the same month in 2022, with a slight uptick of 0.20 per cent compared with the previous month of the same year.

Regarding the cumulative level, the general index for the first eight months of this year has seen a 2.45 per cent increase compared with the same period in 2022.

Economists contend that while the inflation rate for August 2023 is deemed “manageable” at 0.88 per cent, the cumulative rise of 2.45 per cent for the year’s initial eight months is “concerning” and led to decreased purchasing power among Jordanians.

Economists expressed concern about the potential long-term impacts of inflation, especially if it continues to outpace wage growth.  

Khaled Salameh, an economist, told The Jordan Times that persistent inflation, even at low levels, gradually erodes the purchasing power of consumers, and affects the low-income group significantly. 

While the official numbers suggest a manageable 0.88 per cent increase, the real dynamics beneath the surface are far more intriguing in my opinion, Salameh said. 

“Inflation doesn’t affect everyone equally, low-income households often spend a larger proportion of their income on essentials, so they feel the inflation more,” Salameh added. 

Hussam Ayesh, economist, told The Jordan Times that the 0.88 per cent increase is manageable. However, Jordanians are perceiving a substantial increase in the prices of everyday commodities, which is much more significant than the reported inflation rate.

“The percentage change in the cost to the average consumer of acquiring a basket of goods and services needs to be thoroughly examined because it doesn’t accurately reflect the increase in the prices of goods or services,” Ayesh added.

Consumers are experiencing a higher inflation rate than the one announced by DoS, according to Ayesh.

Raha Omar, a retired schoolteacher, worries about the impact of inflation on her fixed income.

 “I live on my pension, and it’s fixed. The rising prices are eating away at my purchasing power. I have to be extremely cautious now,” Omar told The Jordan Times. 

“I hope the government takes steps to address this issue,” said Omar. 

“It’s becoming increasingly difficult to make ends meet. Groceries, school fees, and fuel prices have all gone up,” Ahmad Sarawi, a father of two children, told The Jordan Times. 

Sarawi added that his salary hasn’t increased to keep up with these rising costs. “We are cutting back on essential expenses just to make sure we can cover our basic needs,” said Sarawi. 

In the end, it’s not just about the numbers; it’s about how people feel about their economic well-being, Sarawi concluded.