Thailand plans new minimum wage hike, keeps inflation target next year. The Thai government said on Tuesday that it would boost the country’s minimum wage beginning in January, reaffirming an earlier agreement and indicating that it intends to raise it even higher in March.

A wage committee that included representatives from the government, businesses, and workers previously agreed to raise the daily minimum wage by 2.37%, with the increase taking effect in January. However, Prime Minister Srettha Thavisin regarded the increase as insufficient.

Srettha stated that the committee would get together in January to discuss the possibility of a wage rise that would be revealed in March. “There is no need to raise wages once a year,” he informed the reporters of the news organization.

The Pheu Thai party, which is currently in power, ran its campaign on a populist platform, one of its central tenets being the increase of the daily minimum wage to 400 baht, despite worries over the impact on competitiveness.

In March, Labor Minister Phipat Ratchakitprakarn informed reporters that another inquiry covering local wage rates and professional groups would conclude. The purpose of this investigation is to identify locations and organizations that have the potential to enhance salaries.

The minimum salary ranges from 328 to 354 baht, equivalent to $9.49 to $10.24. This range varies from region to region within the country. The committee has agreed to increase the pay threshold from 330 to 370 baht.

Increasing salaries at a time when borrowing rates were at an all-time high, and Southeast Asia’s second-largest economy was falling behind its regional counterparts may make sectors less competitive, according to warnings issued by businesses.

In a separate development, the cabinet of Thailand voted on Tuesday to allow the central bank to maintain its goal range of 1% to 3% for headline inflation in 2024, which is the same as it was this year.

In November, Thailand’s headline inflation rate (THCPI=ECI) was recorded at -0.44%, the lowest in almost three years. This statement occurred after the data was released. Government initiatives that resulted in lower energy costs and declining meat prices are what are causing deflationary pressures.

A spokesperson for the finance ministry named Pornchai Theeravet, who also serves as the head of the fiscal policy office, stated in a statement that the inflation goal, which serves as a guide for monetary policy, is evaluated annually and that the range of 1% to 3% is beneficial to economic growth.

The government also approved a draft budget law for the fiscal year 2024 that is worth 10.7 billion dollars and 3.48 trillion baht. This measure will be presented to parliament the following week.

According to Pornchai, who informed reporters that specific transfer fees have decreased to 1% from 2% and that some mortgage registration fees have decreased to 0.01% from 1%, the government has authorized an additional year of lower property costs.

According to him, the reduction would result in a loss of income for the government of 5 billion baht, but it would increase growth by an additional 0.5 percentage points.