Low Consumer Demand on Ramadan Goods Expected

Overall Market Demand Down 30-40% in 2018

تم نشره في Thu 12 April / Apr 2018. 12:00 AM
  • Ramadan goods on display - (AlGhad/Osama Rifai)

AMMAN —AlGhad— Representatives of the commercial sector foresee a significant drop in consumer demand on Ramadan goods ahead of the holy season, as the public’s purchasing power has eroded, they say, due to the recent price hikes, unmet by boots in average pay indices.

Overall, demand has declined 30-40 per cent so far, compared to demand levels in 2017, deputy president of the Jordan Chamber of Commerce, Ghassan Khirfan said.

Chairman of the Foodstuff Merchants Association Khalil Hajj also confirmed Khirfan’s estimates. He stated clearly that the sector is not looking forward to the holy season’s usual flare, as household priorities shift.

Over the recent years, Hajj explained, the sector’s profitability has been declining, also, at least in part, due to the decline in purchasing power. The price hikes and relatively low wages have eroded demand.

Meanwhile, economist Dr Qassim Hammouri confirmed to AlGhad that the erosion in consumer purchasing power is mainly due to the reasons above.

Ramadan is bound to arrive in the middle of the month, Dr Hammouri exclaimed. It is likely that households will not be able to engage in the typical consumption spree this year, as wages are mostly spent before the middle of the month even.

Notably, an official study by the Economic and Social Council on the implications of government taxing decisions, issued February 2017, indicates that the taxation decisions last year have greatly affected consumer patterns.

According to the study, 49 per cent of Jordan’s impoverished households have given up numerous basic foodstuff to make ends meet.

Low and fixed income households, the study highlights, have also shown significant shifts in purchasing and consumption patterns.

Many have substituted commodities for cheaper ones then can afford.

Earlier, the government boosted taxation in an attempt to secure USD450 million to fund the deficit correction plan under the agreement with the International Monetary Fund (IMF).

In a pre-emptive attempt by the government to contain the price hike, the government raised the minimum wage limit from JOD190 to JOD220.

Economists and financial experts have repeatedly stressed the wage boost is not enough to meet the strains of the price hikes, caused by the new taxation policies.