Inflation rose by 2.94 per cent in June, after it had increased by 2.92 per cent the previous month – this clearly indicates that the economy is in a state of ‘stagflation’. Inflation is growing without a correspondent increase in sales and employment, the Chamber of Small and Medium Enterprises said yesterday. However, the government is increasing the pressure on businesses through European Union directives, the raise in VAT and the introduction of eco-tax, the GRTU pointed out.

The problem is exacerbated by the fact that the public sector is chasing consumers as well as businessmen and demanding that they pay their dues within a relatively short period of time, and this at a time when businesses are not increasing their sales and consumers are not earning enough.

If tourism and exports were on the rise, then entrepreneurs would be encouraged. But this is not happening, the GRTU stressed. The economy is contracting while more people are seeking employment.

The GRTU said it is highlighting this point for the sixth consecutive month, but no action has been taken as yet.