Experts: Rise in "Consumer Confidence" Index Boosts Economic Optimism

The Ipsos Consumer Confidence Index was released on Friday; it is a quarterly national survey that measures consumer opinions regarding the current and future state of the economy, their personal financial situations, and their ability to save.

The results showed an increase in the index of confidence in local economic trends by 8.6 points, reaching 58.5 points out of 100, while 50 percent of consumers expect the economic situation to improve over the next six months, compared to 37 percent who expect it to remain stable and 13 percent who expect it to decline.

Furthermore, 64 percent of consumers believe that things in Jordan are heading in the right direction, placing Jordan in fourth place among 23 countries included in the global comparison, after China, Saudi Arabia, and India.

Economic expert Wajdi Makhamreh indicated that the rise in the index reflects a gradual improvement in economic expectations, yet sub-indices reveal a gap between optimism regarding the future of the economy and the continued financial pressures on households.

He added that the rise of the local economic trends index to 58.5 points, and the fact that half of consumers expect the economy to improve over the next six months, reflect growing optimism about the coming phase, but they do not constitute sufficient evidence of an improvement in actual income or consumption.

Makhamreh noted that the decline in the personal financial capabilities confidence index to 30.2 points, despite the improvement in the general index, indicates that positive expectations have not been reflected to the same extent on households' perception of their financial situations, in light of challenges related to income, cost of living, and the ability to save.

He explained that the job security index rose to 50.3 points, yet unemployment and the lack of job opportunities remained at the forefront of consumer concerns at 56 percent, followed by inflation at 54 percent. This confirms that the primary challenge lies in providing sustainable jobs and improving wages and purchasing power, rather than merely boosting positive expectations.

He added that the belief of 64 percent of participants that Jordan is heading in the right direction reflects positive sentiment toward the Kingdom's general path, but transforming this confidence into tangible economic improvement requires accelerating productive investments, expanding job opportunities, supporting labor-intensive sectors, and reducing pressures on the cost of living.

Makhamreh summarized the results by stating that the Ipsos report indicates an improvement in confidence in the future of the Jordanian economy, but at the same time reveals a gap between general economic indicators and the financial sentiment of households, emphasizing that the real test for the coming phase lies in the ability of growth and investment to generate job opportunities, better income, and improve the purchasing power of citizens.

For his part, financial and economic expert Dr. Mohammed Al-Hadab Al-Sarhan confirmed that the rise of the Ipsos index to 42.6 points, compared to 36 points in the same period last year, carries an economic significance that goes beyond an improvement in general mood, as it indicates improved expectations and the creation of more favorable conditions for making spending and investment decisions.

He explained that benefiting from the improvement in local demand requires increasing the share of national products and services in additional spending, and developing local supply chains, especially in food and pharmaceutical industries, service activities, and small and medium-sized enterprises. He warned that directing a large portion of spending toward imported goods might limit the impact of increased consumption on local production and increase the import bill.

He added that maintaining the positive trend of consumer confidence requires measuring its actual reflections on the economy by monitoring productive investment, newly created jobs, real wages, and the share of local production in demand. He called for identifying sectors capable of expanding production and employment, and addressing the financing and operational obstacles that limit their growth.

Al-Sarhan concluded by emphasizing that the most important indicator in the coming phase will not be the rise in consumer confidence alone, but the extent to which it reflects on household incomes, corporate investments, and job opportunities, because sustainable confidence is based on economic results that the citizen feels in their daily life.

The representative of the clothing and textile sector at the Jordan Chamber of Industry, Engineer Ihab Qadri, said that the view of 64 percent of participants that things in Jordan are heading in the right direction represents a positive indicator of confidence in the Kingdom's general path, and carries economic importance that exceeds the moral dimension, as future expectations influence individuals' decisions regarding consumption and saving, and companies' readiness to invest, expand, and hire.

He added that these results are of particular importance in light of economic challenges and regional instability, noting that confidence in stability and the general direction creates an environment conducive to growth, but it is not enough on its own to prove an improvement in living conditions.

Qadri concluded by emphasizing that economic success is not limited to the citizen's confidence that their country is heading in the right direction, but requires them to touch the results of this path in their income, job opportunities, and standard of living, so that confidence transforms from positive expectations into a sustainable economic and social force.