Middle Class Shrinks as Gov’t Policies to Address Deficit Carry On

تم نشره في Wed 28 September / Sep 2016. 11:00 PM
  • Middle class deterioration and inflation - (Expressive)

AMMAN —Al Ghad—Recent official data published show that the middle class in Jordan has shrunk to no more than 30 per cent, at best; due to inflation, which has reflected negatively on currency purchase power, next to endless taxation and the suspension of subsidies on several commodities, without an opposing equivalent increase in income medians. This approach, experts confirm, will only erode the middle class segments of society, in the stead of bridging the deficit, as claimed by the government.

Contrarily, public indebtedness in 2011 amounted to JOD14.48 billion, and has leaped to JOD25.5 in 2016, nearly 76 per cent, meanwhile eroding the middle class in Jordan from 41 per cent in 2008 to 29 per cent in 2010. And so far into 2016, the government has yet to publish the actual figures on the rates of poverty and class segmentation, and has sufficed to announce that poverty has exceeded 20 per cent in 2012.

The middle class, in every society, experts say, is the most productive and with the highest consumption and purchase power, which only means that its erosion will only lead to the further economic deterioration of an economy that is already in predicament.

Accordingly, World Bank reports confirm that at least one third of the Country’s population had been living below the poverty threshold for the duration of at least one quarter of the year.

In other words, 18.6 per cent of the population whom are not considered poor in official census have been in “occasional” poverty, as opposed to the traditionally reckoned “persistent” poverty. Meaning segments of the lower middle class who slip in and out of poverty occasionally throughout the year.

Former Minister of Public Sector Development, Dr Mahed Madadha, and economist Dr Mohammad Bashir, explain that the erosion is caused by three main factors; first, the regression in economic growth in general; second, because of the income corrosion caused by inflation and increasing prices, and last but not least; the deterioration of public services facilitated to the middle class, namely education and health. Bashir also added that the middle class cannot for long sustain under the weights of current public economic policies.

Current GDP growth, according to official figures, averaged around 2.3 per cent during Q1-2016, compared to 2.4 per cent in Q1-2015, and 3.1 per cent in Q1-2014.