Addressing inflation necessitates 'wise gov't economic policy' — experts

AMMAN — Economy experts on Saturday stressed that addressing inflation requires successful economic policies that take into consideration local and international conditions to improve the living standard of citizens.  

Speaking to the Jordan News Agency, Petra, the economists called for replacing basic imports with local industries and products, increasing production, stimulating investments, lowering taxes and creating jobs in a bid to increase the income level of individuals. 

Social Security Investment Fund (SSIF) CEO Kholoud Saqqaf said that local or imported inflation is the result of several factors, including high demand and lower production. This creates a gap in the market, which contributes to higher prices and more money circulated among people, which makes them spend more.

Saqqaf said that addressing inflation depends on its causes, adding that if the economy is suffering from increased demand, central banks can opt for "recession policies" that help lower the overall demand through increasing the interest rate.

In other cases, options might be limited in addressing the inflation, such as the hike of prices of oil derivatives, unless governments set prices in a direct way, the CEO added.

Majd Shafiq, a member of the Amman Stock Exchange and an economic and financial expert, said that any country that exports large shares of its consumption and production materials will be highly affected by price hikes at the international levels.

He noted that Jordan “imports inflation” despite many attempts to replace local industries, especially that local production materials, such as oil, are mostly imported, calling for addressing the issue through cross-government economic policy.