Jordan summer sales working well for economy
Jordanian expatriates and Arab visitors boosted clothing sales in summer, offsetting a slowdown in domestic consumer spending, according to a leading merchant.
Fahed Tawileh, board member of the Jordan Chamber of Commerce (JCC), said Wednesday that rising living costs in the Kingdom has pushed many Jordanians to spend less on clothing, which he considered as basic products.
But, according to Tawileh, who represents the garment and jewellery sectors at JCC, the return of Jordanian expatriates to spend their summer holidays in the country and the inflow of tourists from Saudi Arabia and other Gulf countries boosted demand for clothes, which traders and importers expected to be sluggish.
Describing the performance of the sector as good so far, he credited Syrians in Jordan for higher sales.
The inflow of Syrians fleeing violence in their country pushed up not only garment sales but also other commodities such as food, he added.
However, Tawileh expressed concerns that a recent government decision to hike customs duty on imported clothes would send the sector into confusion and slowdown.
On September 11, the Cabinet decided to impose a 20 per cent customs duty on imported clothes, reinstating the tariff system that was in place before July 2010.
The decision was taken upon recommendations by the ministers of trade and finance and the director of the Jordan Customs Department.
Before the decision, importing apparel was subject to a customs levy of 5 per cent of the value of the garments, or JD1 on each kilogramme of imported clothes, whichever was higher.
Tawileh indicated that as clothing traders will pay higher customs fees on imported garment they would reflect the increase in costs on consumers, which could cause slowdown in the sector.
“Any increase in living costs should be accompanied by an increase in income,” he said, criticising authorities for taking surprising decisions without consulting stakeholders.
He noted that many merchants have made orders of clothes few weeks ago on the basis of paying 5 per cent only as customs duties, but when the stock arrives in the Kingdom they would be subject to a 20 per cent charge.
Some orders were made for a targeted market of medium income people, but the new tariff systemwould make it harder for merchants to sell their products.
By: Omar Obeidat