"I cannot see a scenario where inflation will go back down to 1%, in the foreseeable future at least." This was said by the Director General of the Malta Employers' Association Joseph Farrugia, who also foresees prices continuing rising not just next year, but also in 2024.

It paints a bleak future for those of us living through this. If prices keep rising, will we be able to keep up? Can our wages sustain us if the price of everyday goods continues to increase?

These are questions many of us are asking. And many of us are worried. It is already extremely difficult to buy a home, or to rent.

The situation is enough to make one anxious, and possibly even panic.

The obvious solution to most employees will be to ask for a raise. Unemployment is extremely low, so looking for another job shouldn't be a problem. But this situation creates another issue.

"If we enter a situation, known as a wage-price spiral, it would be dangerous as it could push companies into losing their competitiveness. Companies in Malta in general will be less competitive compared to other countries abroad, and this is what we have to guard against," Farrugia explained.  A wage-price spiral is a concept where, because of inflation, employees might demand better wages and businesses will have to pass on that cost to consumers as the wage increases would outweigh gains in productivity and businesses would not be in a position to absorb such increases, which will create another round of rising prices.

There is no simple solution to the problem. But if prices rise, wages need to equal that rise in order for people to be able to keep up. If they can't keep up, they will not spend on non-essential goods, which will heavily impact businesses. So the situation is like being between a rock and a hard place.

The MEA came up with a proposed amendment to the COLA mechanism for 2024 onwards to ensure stability, but this needs to be further debated to see just exactly what kind of impact it can have.

Inflation is not a problem Malta can solve alone. Inflation right now is an international issue. But we could plan ahead.

For example, one of the main high costs currently is energy. The government is spending millions and millions to subsidise energy and keep costs for consumers low. We should focus on creating more renewable energy infrastructure. More solar panels on roofs for instance, becoming more sustainable. We've made advances in this area, but realistically speaking these have not been enough.

We could focus on improving our public transport system, thereby meaning that we would have fewer cars on the road, and thus families would have less expenses in that regard. But these are longer-term ideas to better prepare us for the future.

As for right now, businesses that can assume the burdens of the price increases while still making a profit should do so, and not transfer that burden onto consumers, as it could backfire with people spending less on products or services. If they have no other option but to pass on that cost or risk making a loss, then that is another thing.

We now look ahead to the upcoming budget. We must protect the purchasing power of the people, and must ensure that businesses can stay afloat. That needs to be the priority. If we can weather the storm, we would be in a position to succeed later down the line.