ASEAN KEY DESTINATIONS
Wage hike, flooding lowers Thai GDP
Officials said a wage increase from an average of 200 baht (US$6.60) to 210 baht (US$7) a day would have an impact, as wages are a significant investment cost.
Prime Minister Abhisit Vejjajiva said in Bangkok yesterday that effective from January 1, the government would raise the minimum wage by 11-12 baht, depending on each province's cost of living.
Mr. Abhisit had previously proposed a flat rate of 250 baht nationwide. However, the tripartite Central Wage Committee comprising the government, employers and labour representatives disagreed and countered with an average increase of 10 baht.
The committee said a 250-baht flat rate, representing a 21 percent increase from the top wage in Bangkok, currently 206 baht, would hurt overall economic growth too severely.
The minimum wage currently exceeds 200 baht only in Bangkok and six other highly developed provinces, and is 151 to 184 baht elsewhere.
Economists had called the premier's idea too aggressive and inappropriate. They said a too rapid rise in wages would place more pressure on employers' costs with no corresponding improvement in worker productivity.
The Fiscal Policy Office will make its final review of the overall economy in December. The most recent review projected 7.5% growth in GDP.
Thailand registered growth of 6.7 percent in the third quarter, with estimates of a rise of 2-3 percent in the fourth, he said.
Mr. Pisit said that projection was based on the baht remaining at 29 to the US dollar. If so, it could shave 0.2 percent off GDP growth. Staying at 29.50 baht would affect GDP growth by only 0.1 percent.
"Right now it's standing at about 30 to the dollar, and that should not affect the overall economy," he said.
Despite the severity of damage from the recent flooding, pressure on growth will be slight, dropping the projection to 7.3-7.4% from an earlier figure of 7.5%. That is also lower than the recent 7.9 percent figure from the National Economic and Social Development Board.
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