‘Salary hikes won’t spark high inflation!’ – Economist

The recent 10 percent salary hikes announced by President Mokgweetsi Masisi for civil servants, including disciplined forces, will not be inflationary.

Since the announcement, fears have risen that the move, which comes into effect on the 1st of April, could spark a sudden increase in commodity prices.

However, speaking to Voice Money this week, a local economist, Moatlhodi Sebabole allayed fears that prices on goods and services were set to balloon.

Sebabole explained this is the first major adjustment of salaries in a decade and comes at a time when workers’ disposable income is at an all time low.

He further revealed this is the first salary alteration that is above inflation.

Despite this, Sebabole feels the modification is not enough to create demand uptake, further explaining he does not foresee much change to the current status quo.

“The increase is not going to make people rich but will certainly give them breathing space,” predicted Sebabole, adding he assumes workers will use this disposable income to either pay off their debts or to acquire more credit.

 

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