Minister of Economic Development Fayyaz Ismail has stated implementation of the minimum wage will impact inflation.
Speaking at the announcement ceremony for the minimum wage, Minister Fayyaz said the government will be closely watching the inflation rate. He detailed that the review of the minimum wage has determined that abnormal short-term inflation will occur after its implementation, due to the current economic situation in the globe following the COVID-19 pandemic.
The minister noted the current shipping cost is currently inflated to three times the normal amount and that the implementation of the minimum wage is expected to increase the price of goods and services. He said the Maldives has a social market-driven economy and that businesses have the freedom to set prices within the established regulations, adding the government will only control prices of essential goods such as staple foods.
Furthermore, Minister Fayyaz said the Employment Tribunal will be responsible for regulating the minimum wage and will look into complaints submitted by employers and employees. He also said the government is willing to make any necessary changes to the regulation of the minimum wage based on the complaints.
The minister said a country's economy is based on the work of employees and employers and that the government is responsible for assisting in improving their work. He added the government will continue to make changes that provide long-term benefits to the nation, even if it means short-term expenditure.