Amman: Prime Minister Bisher Khasawneh has instructed ministries and relevant authorities to implement all necessary measures to address potential inflationary impacts on the Jordanian market and the global economy. These effects are anticipated due to regional developments stemming from the ongoing Israeli aggression against the Gaza Strip and existing conditions in the Red Sea.
Chairing the Cabinet session on Sunday, the Prime Minister highlighted that 15% of international trade volume passes through the Bab al-Mandab Strait. The continuous Israeli aggression has triggered regional developments perceived as a threat to transit through the strait by some transport companies.
Khasawneh revealed that, according to international and ministry estimates, transport costs for trucks from Southeast Asia have risen by approximately 160-170%, and in many cases, by 60-100% for trucks and containers from North America and Europe. Additionally, insurance fees for imported goods have surged.
He warned that if this situ
ation persists, it could lead to inflationary effects, as commercial and industrial sectors operate on the basis of legitimate profit. Consequently, increased costs are likely to be reflected in the prices of goods and commodities.
Recognizing the responsibility of the private trade, industrial, and tourism sectors, Khasawneh praised their choice to stick to reasonable profit margins.
Khasawneh stressed the government’s duty to mitigate inflationary aspects, pointing out that he assigned the Deputy Prime Minister for Economic Affairs and the Ministers of Finance and Transport to explore measures beyond financing windows.
The Prime Minister suggested adopting a measure similar to the one implemented during the Coronavirus pandemic, setting a customs cap on the value of incoming containers at their pre-October 7th, 2023, price cap. He issued instructions to this effect.
Khasawneh assured the availability of sufficient supplies of essential commodities in both military and civilian consumer establishments. T
hese establishments will continue to provide essential commodities at prevailing prices until the end of Ramadan, approximately two months away, he added.
Directing the Minister of Industry, Trade, and Supply, Khasawneh emphasized the need to enhance monitoring mechanisms in the markets and ensure a secure strategic stock of wheat, barley, and essential commodities. He stressed the necessity to strengthen monitoring mechanisms and deter any group attempting to exploit the unprecedented situation to affect citizens’ livelihoods.
Furthermore, Khasawneh directed the Ministers of Industry, Trade, Supply, and Transport to monitor shipping conditions and the regularity of shipping movement. Although delays occur due to maritime companies avoiding the Bab al-Mandab Strait and opting for the Cape of Good Hope, the regularity of navigational movement towards the port of Aqaba remains fundamentally intact.
The Prime Minister also emphasized ongoing efforts to explore alternative options within the framework of “feed
er lines.” While acknowledging that goods continue to arrive regularly, he noted that some companies, whose ships have ceased passing through the Bab al-Mandab road, are reconsidering this decision. He expressed concerns about potential inflationary impacts on the Kingdom due to significant increases in shipping and insurance costs, which may influence the prices of goods.
Khasawneh highlighted the commitment of the Central Bank of Jordan to persist in funding initiatives initiated during the COVID-19 pandemic, allocating a sum of one billion and 200 million Jordanian dinars. Additionally, there may be provisions for financing windows, not exceeding one million Jordanian dinars, to assist merchants in providing basic goods within the framework of financing programs.
Emphasizing the essential nature of continuity in economic life, Khasawneh acknowledged the challenging regional circumstances with military actions and aggression against the people in the Gaza Strip. Despite these challenges, he underscored th
e need for Jordan’s economic performance to recover and achieve growth rates similar to or surpassing the outstanding performance of the previous year.
The Prime Minister noted that the tourism sector outperformed 2019, considered the base year for performance, and that the Kingdom would have achieved an economic growth rate of approximately 2.8% without the impact of the last quarter of the previous year. He acknowledged the significant effects of the post-October 7th period on general performance, investment, exports, trade balance, and various sectors.
Highlighting the importance of returning to normalcy in economic, investment, and commercial life processes in Jordan, Khasawneh reaffirmed emotional, political, and legal solidarity with the people in Palestine. He highlighted the efforts led by His Majesty King Abdullah II to achieve a ceasefire, ensure the sustainable delivery of humanitarian aid, and initiate a comprehensive process toward the establishment of an independent, sovereign Palestinian stat
e.
“We achieved a lot last year, but the last quarter greatly affected various sectors. However, the process of life, even emotionally and mentally, must return to its normal pace at home. This enhances our resilience and cohesion, enabling us to have advanced positions and support our national issues, especially the Palestinian cause,” he concluded.
Source: Jordan News Agency
