Monday, April 25, 2011

Thai PM plans further minimum wage rise by mid-year

Apr 24, 2011
BANGKOK - THAILAND plans another rise in minimum wages mid-year to offset the higher cost of living, Prime Minister Abhisit Vejjajiva said on Sunday, as his party prepares for what is expected to be a close-fought election.

The daily minimum wage was increased in January between 8 baht (S$0.32) and 17 baht. The average rise was 11 baht, or 6.4 per cent, the biggest in more than a decade.

Mr Abhisit's party has pledged to raise the daily minimum wage by 25 per cent over two years. An election is expected around the middle of the year.

'A ten-baht rise early this year, I think, is not enough,' Mr Abhisit said in his weekly address, adding the next rise could come 'around May or June.' He gave no other details.

Any wage increase could fuel inflation expectations, already worrying the central bank, which has raised its benchmark interest rate six times, by 25 basis points each time, in this cycle, which began last July.

Economists expect the central bank to raise the policy rate, the one-day repurchase rate, for a seventh time by 25 basis points to 3.0 per cent at its next meeting on June 1, making it one of Asia's most hawkish. -- REUTERS

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