Gross Domestic Product, Number of Employees and Inflation Rate and Its Relationship to Private Final Consumption in Jordan

Abstract

Jordan is affected by an increase in the ratio of public debt to a percentage of GDP. The increase rate has reached 85.8% (Jordan’s central bank in numbers). And this is a serious indicator that affects the economic conditions and living standards. The study dealt with the final private consumption and the factors affecting it. The first factor is the gross domestic product (GDP), and it is a reverse view of influence, consumption is one of the components of GDP through spending, which is influential and influenced by it, the second factor was the demographic effect, and the study took the number of workers as part of the demographic factor and the third factor is the level of prices. The study took the rate of inflation. In cases of inflation and high prices, the state resorted to reducing public spending and increasing taxes to reduce actual demand (Hardan, Tahir 1997).

The study was from 2006 to 2016 as a sufficient period for measurement and the availability of accurate data. The study found that there is a relationship between the first and second variable and denied the relationship to the third variable, due to price fluctuations in the study period and one of the most important recommendations was to replace local labor with foreign labor.