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An alarming signal

Oct 17,2018 - Last updated at Oct 17,2018

The Textile and Readymade Clothes Syndicate in Jordan is sounding the alarm about the persistent drop in sales of clothes and textiles, since the beginning of this year; no doubt because of the weakening economy and the worsening of customers’ confidence.

President of the syndicate, Moneer Deyeh, also says that this alarming drop is affecting the lives of no less than 52,000 citizens and their families. If substantiated and verified, this slowness in the textile and readymade clothes and shoes made in Jordan sends an alarming signal to the government because if one sector of the national economy is weakening so much, other sectors will no doubt follow suit.

The message of the clothing and textile syndicate to the government is loud and clear: Get busy stimulating the economy before bankruptcies among the business community become the rule rather than the exception and when this happens, no matter what tax law is finally approved and adopted, tax revenues will drop also at an alarming rate.

It is no secret that the public at large is short on cash and given the high inflation rate in the country, because of many reasons, the purchasing power of the middle and lower classes has dipped to an unprecedented low level. It would be interesting and revealing if other branches of the economy also report on their business activities, in order to provide the government with a broader and complete picture of where the economy and business confidence stand.

It is already known that the real estate and construction sector is at an all time low level. It is also well established that the farming sector is deeply wounded by the absence of export markets. Corporations in the country, including the manufacturing sectors, are simply not recruiting new employees because their businesses are also affected by the weak economy.

What would it take to enable the government to adopt and implement a comprehensive business stimulus must now occupy the attention of the authorities the most. The rule of thumb among economists suggests that the most potent remedy to weakening economy is to adopt a stimulus. Part of any such stimulus must be lowering taxes, not raising them.

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