Nonetheless, the high level of business profit margins suggests that, even if unit labor costs begin to rise more quickly than prices, the effect on inflation could be muted for a time because firms would have room to absorb some of the cost increases in the form of reduced profit margins. Such was the experience in the late 1990s.
I am happy, however, that international institutions such as the International Monetary Fund gave us the pat on the shoulder which we so badly needed to stay on course. As I have mentioned time and again, the unhappy situation which prevailed in the Boardroom traces its origin in a conflicting interpretation of the role and responsibilities of the Bank’s executive management and its Board.