The Employment Act which was put into force last Wednesday could pave the way for inflation rates to go even higher, the Governor of Maldives Monetary Authority, Abdulla Jihad, has said.
The Governor said that since the Employment Act stated that all employees were entitled to overtime pay for every hour they worked beyond eight hours and since they were also entitled to 30 days leave every year, the cost of productivity would increase. He said that this would cause “Wage Push Inflation” to rise and in turn adversely affect inflation as a whole.
“Before, even if you worked beyond eight hours you weren’t entitled to overtime pay,” he said. “Now it’s the law that overtime should be paid for the extra hours.”
Jihad did not say how high the inflation rate could soar due to the Employment Act coming into force, but said that it was saddening that such things weren’t taken into consideration.
“The economic impact of a law should be assessed before it is passed,” he said.
He also said that it was very likely that once the new Constitution was in effect, it could also cause adverse effects on the economy and inflation.
“If everything in all the countries of the world is to be implemented here then things will get out of hand very quickly,” Jihad said.
He said that reform should come about but that it should be done slowly and very carefully.
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