Governor of Bank of Cape Verde calls for “moderate” salary increases to curb inflation

9 June 2006

Praia, Cape Verde, 09 June – The Governor of the Bank of Cape Verde, Carlos Burgo, has called for “moderation” in salary increases, currently being negotiated between governments and unions, in order to curb inflation and ensure the country’s competitiveness.

Burgo’s statement came at a time when unions are in favour of a salary increase of 5 percent, and threaten a general strike if that demand is not met, while the government is proposing an increase that is in line with projected inflation, of around 3 percent.

After an audience with the Prime Minister, José Maria das Neves, Burgos said that cape Verde had to adopt “salary moderation” in order to prevent an inflation hike, particularly because it cannot overtake inflation in the European Union under the terms of an existing exchange rate parity agreement.

A rise in the price of oil, Burgo said cited by the Inforpress news agency, implied, “adjustments to external shocks,” and “less national revenue,” but buying power would be bolstered by increased productivity and the competitiveness of the economy, rather than salaries.

“With the price of oil higher, we will have less national income, and we have to adjust to this reality,” and not “fight for a slice of cake that has got considerably smaller,” he said, referring to negotiations between the government and unions. Burgo also called on unions to consider the country’s economic interests, because “if the economy is better off, then Cape Verde is better off.” (macauhub)