Inflation fears return following pay hike discussion
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A plan to increase the basic pay of civil servants in the next fiscal year is under discussion in Parliament, as the central bank is fretting for the escalation of inflation.
An unnamed MP from the Union Parliament said that under the discussion, civil servants’ basic pay will start at Ks 150,000. And the maximum will be Ks 1,200,000.
Ministries currently have 12 or 13 pay grades and the system is due to be reorganised.
The new pay scale for an office assistant will be Ks 150,000 and managing director and director general will be paid Ks 1,200,000. The difference between the top and lowest grade is eight fold. Plans are under way to calculate a pay rise for the defence services.
The proposed pay scale would be Ks 150,000 (office assistant); Ks 300,000 (superintendent); Ks 400,000 (officer); Ks 700,000 (director); Ks 1,200,000 (managing director and director general), said a parliamentarian.
Led by the Union Parliament Speaker, officials from the ministries and chairpersons of the parliamentary committee held a discussion on the budget, national planning, budget and taxation bills, on December 18.
Currently, the pay scale for a daily shift worker (excluding Saturday and Sunday) is Ks 3,000 per day and an office assistant gets Ks 75,000 per month plus Ks 30,000 for other allowance. The salary of a director general is Ks 180,000 and deputy director general is Ks 150,000.
Pay hikes have been blamed for the increasing prices of consumer goods.
Officials at the Central Bank of Myanmar in the past two months have warned against the perils inflation may bring.
At the recent SME Financing and Financial Policy seminar, Sett Aung, deputy governor, also cautioned against inflation. Still, he said that unlike deflation – as witnessed in some developed countries - could slow economic growth, inflation carries some benefits.
“In our country, people always say that rising inflation isn’t good because it leads to people suffering. Inflation is important. Deflation isn’t good. Likewise, inflation hikes can also be dangerous. Controlling inflation means controlling the economy. Controlling inflation could harm small and medium enterprises,” he said.
Myanmar’s inflation is rising near 10 per cent, largely because of the country’s reliance on imports. Large trade deficits have brought down the value of Myanmar kyat against US dollar, which in turn made imports more costly and hence boost inflation.
Sett Aung admitted that the kyat has weakened somewhat against the greenback. However, he assured all that the exchange rate is stabilised.
