Price ceilings on foodstuff not enough to combat rising prices — economists

[14-04-2022 09:55 AM]

Ammon News - The price ceilings set by the Industry Ministry on foodstuff are not sufficient for dealing with price hikes, according to economists.

Economist Hosam Ayesh said that price ceilings are one of the tools the government has to manage price hikes. However, he said that while supply and demand is supposed to determine prices, this is not the case in the Jordanian market.

“There is a difference between price and pricing. Pricing is supposed to have a certain system and a series of inputs used to specify the appropriate price. We need to fix and regulate these [pricing] inputs in order to reach a suitable price that matches the citizen’s income and purchasing power,” Ayesh said.

He emphasised that people, merchants, and the government need to realise that price hikes “are not a transient issue, but are continuous, and we must get used to it”.

“It is very important now to think of a way to mitigate the impact of price hikes on consumers through policies, programmes, plans and scenarios prepared in advance to deal with upcoming price hikes,” he added.

He noted that given Jordan’s heavy reliance on imports, “we are always affected”.

“The world has changed and the tools that have been used in the past should change as they are not effective anymore,” Ayesh continued.

Economist Isam Qadamani described price ceilings as “useless and temporary”, as price hikes are due to increasing costs and not increasing demand.

“The government must diversify import sources as well as providing alternatives, and the citizen must adapt to the price hikes, as they are a global issue,” Qadamani said.

Qadamani encouraged merchants to provide goods with fair prices, according to the price ceilings. But, he noted, “price ceilings do not mean lower prices”.

Mahmoud Qadri, a Jordanian in his 40s, said that the current wave of price hikes is the most intense he has experienced.

“As a married man with three kids and a limited income, it is extremely difficult to deal with the current price hikes,” Qadri said.

He indicated that merchants use price hikes to greater increase prices sometimes. “The measures taken by the government to put price ceilings are definitely good but unfortunately not enough, there needs to be more monitoring,” Qadri said.

Hala Salim, a single mother living in Amman, said that since the pandemic began she only buys the basics and essentials.

“We cannot afford to have anything secondary, as we can barely afford the basic stuff we need on a daily basis,” she said on Wednesday.

Salim called on the government to take measures to not only “stabilise” prices but to lower them, as she described the current price hikes as “unreasonable”.

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