The Consumer Price Index and its Role in Influencing Exports, Food Imports, and the Local Output of the Jordanian Agricultural Sector

Abstract

Jordan is in the east of Asia, with 91971 km2 of land and water of 329 km2. The study examined the consumer price index as an independent factor and its impact on exports, food imports, and the agricultural sector’s local output as dependent factors in the Jordanian economy. The study took the period from 2006 to 2016 as a sufficient period for measurement, as the agricultural sector is important in the process of economic development, so it was necessary to study the factors affected by the process of changing the price structure represented in the index of the consumer price, as this factor is important in decision-making by businessmen and government alike. To express these variables, statistical measures had to be taken in the analysis, based on finding the simple linear regression of the dependent and independent factor by least squares and testing the estimated equation to avoid measurement errors. The relationship between the different variables influenced by the consumer price index, which the study was taken into, represents the column of this sector of production, export, and import. Under globalization, a country cannot be satisfied with its production and self-sufficiency. Still, there is an external world that carries out open international trade according to each country’s comparative advantage, and we believe that Jordan possesses this comparative advantage in the agricultural sector due to its land and work resources. Still, the circumstances surrounding the rise in prices affect this sector. As for the trade balance and Jordan’s entry into the International Trade Organization, the door has been opened for external work in intra-trade with external knowledge until the price increase affects the exported products’ prices. Imported goods can enter at lower prices, which affects the sector. The study found a strong direct relationship between the consumer price index and the agricultural sector’s domestic product, with the addition of economic justifications for these results and the study reached the results and recommendations, the most important of which was finding direct support for citizens in light of the conditions of rising prices and increasing immigrants.