Jordan Times
Thursday, September 27, 2007

‘Jordanians spend more than they earn’

By Mohammad Ghazal

AMMAN - Jordanian households spent more than they earned last year, mostly on nonfood items, a survey has revealed.

A Department of Statistics (DoS) survey on expenditure and income of Jordanian households during 2006 showed that the annual average expenditure of each Jordanian family stood at JD7,550, 21.7 per cent more than the year 2002, when such a survey was last conducted.

DoS Director General Ghazi Shbaikat said in the same period, the annual household average income stood at JD6,220, with 11.3 per cent increase from 2002.

According to DoS, there are some one million Jordanian families with an average of 5.7 members.

The study, conducted by DoS, in cooperation with the Ministry of Planning and International Cooperation, covered a representative sample of 13,000 households from across the Kingdom's 12 governorates. The margin of error is less than 5 per cent.

"The gap between annual income and expenditure for the year 2006 stood at an average of JD1,331," DoS chief told a press conference, adding that the average household expenses increase nationally by 3.5 per cent a year.

The additional expenses last year were covered by bank loans, sale of real estate and properties and remittances from abroad, according to the study.

An economist, Hussam Ayesh, warned that the more people spend beyond their earnings, the country would go deeper into debt, which stood at $11 billion.

Ayesh urged citizens to prudently budget their expenses, stressing that the government should play a role in educating the public on this issue.

At the press conference, Shbaikat said the general rule is that there are no savings as far as Jordanian households are concerned, attributing that to the high cost of living.

Last year, the Economist Intelligence Unit tagged Amman as the most expensive Arab city.

The DoS study revealed that the capital city recorded the highest annual average of expenditure and income. According to the survey, the annual average expenditure of each Jordanian family in the capital amounted to JD8,699, while annual income was calculated at JD7,412.

The lowest annual average expenditure was recorded in Tafileh Governorate, where households spent JD5,766 on average. Households in Zarqa were placed at the tail of the income list, generating an average of JD4,681.

Shbaikat said the study revealed that there is a change in consumption habits amongst Jordanian households as 64 per cent of the expenditure of Jordanian households in 2006 was on nonfood items and services, compared to 60 per cent in 2002.

He added that the survey revealed that the number of households possessing long-life commodities such as cellphones, satellite dishes, refrigerators and cars increased during the year 2006.

In 2002, 37 per cent of Jordanian households owned cellphones compared to 84 per cent during 2006, while the number of households having satellite dishes increased from 38 per cent in 2002 to 76 per cent in 2006, according to the study.

Of the total expenditure of Jordanian households during 2006, 36.5 per cent was for food, 15.9 per cent for accommodation, 7 per cent for education and 2.7 per cent for health.

The highest percentage for expenditure on food was in Tafileh, amounting to 41.1 per cent of the total expenditure of households in the governorate, while Amman recorded the least percentage for spending on food at 28.2 per cent.