Approving a wage increase will generate greater economic inflation | Aprobar un incremento salarial generará mayor inflación económica

By Unitel:

Analyst points out that approving a wage increase will generate greater economic inflation

Economist Gonzalo Chávez indicated that if salaries rise, companies will have to cover their costs, which will lead to a major problem in economic terms.

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Just days before the celebration of Labor Day, when the government typically announces a wage increase, various economic analyses are emerging regarding Bolivia’s economic situation. Economist Gonzalo Chávez indicated that the raise could generate greater inflation.

“Can we afford to raise salaries during this crisis? Many companies will raise their prices to cover their costs, and that generates inflation,” said the economic analyst. [Watch video]

Chávez further explained that there will not only be an increase in the prices of products and services, but small businesses may also shut down, reducing market competition, which also leads to inflation and a worsening crisis, with more unemployment.

“Whether due to costs or monetary expansion, there will be inflation,” Chávez stated, while pointing out that the government should have economic policies to combat inflation and not just decree a wage increase.

Last week, the Bolivian Workers’ Center (COB) formally requested a 15% increase in the minimum wage and a 20% increase in the base salary.

Meanwhile, last year’s wage increase was 5.85% for the minimum wage and 3% for the base salary, raising the wage from Bs 2,362 to Bs 2,500.

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