Governor of the Central Bank of Barbados Cleviston Haynes says that increasing wages is not a sustainable solution to deal with the current rise in the cost of living in Barbados.
He made this disclosure while speaking during the Central Bank of Barbados’ review of the country’s economic performance for January to June this year. “Government will have to make some very difficult choices in order to be able to facilitate an increase in wages trying to chase crisis through wage increases. I think most economists will tell you that that is not really a good idea. What the government has tried to do, which I think is perhaps more recommended is trying to be more targeted, in some of the relief that can provide those who are going to be most impacted by what we hope is a temporary rise in the cost of living in other words, eventually, we hope that oil prices will start to taper off, which means that transportation costs, electricity costs and so on will start to come down that what is happening as it relates to food, that that will also begin to repair itself not necessarily in 2022 but hopefully in the near future.”
Mr. Haynes said an increase in wages could lead to an increase in debt for the country. “We have to be careful not to try to apply a balm to what may be a “temporary situation”. Obviously, temporary shocks can get built-in and become permanent because at the end of the day the government does not necessarily have more funds available to it; therefore, in order for it to to balance these days and we talked about earlier about debt, so you don’t want to increase more debt, so, therefore, you have to look at the composition of your expenditure and therefore I don’t think that from a general point, that trying to pursue prices with wages will be a solution that is sustainable or would be recommended.”
Voice of: Governor of the Central Bank of Barbados Cleviston Haynes