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144863
Tue, 10/05/2010 - 11:32
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http://m.oananews.org//node/144863
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Minimum wage rise will fuel inflation rate, says BoT
BANGKOK, Oct 5 – The proposed increased in the minimum wage will fuel inflationary pressures if it exceeds the core inflation level, according to the Bank of Thailand (BoT).
Speaking of Prime Minister Abhisit Vejjajiva’s proposal to raise the minimum wage to a 250 baht daily rate, Methee Supapong, senior director of the BoT Domestic Economy Department, said that should the Tripartite Private-Sector Committee increase the minimum wage at a higher level than that of the core inflation, it would impact the expected inflation range between 2.5-3.8 per cent for this year.
With the inflation rate set to rise, the central bank will revise its inflation rate projection prior to a meeting of the Monetary Policy Committee, which is scheduled to take place on October 20, he said.
“The minimum wage, if adjusted higher than the core inflation level, will raise the inflation rate this year. But whether the rate will increase more than the inflation targeting depends on how much the wage will rise,” said Mr Methee.
Regarding the current baht appreciation, he said, the department would bring data on the baht rise, overall picture of the economy, and a summary of impacts of the stronger baht on the export sector and the Thai economy for consideration at the MPC meeting so that the committee could use them for its decision on the monetary policy direction.
The central bank projected the core and general inflation rates would stay in a range of 0.5-1.3 per cent and 2.5-3.8 per cent this year, and 2-3 per cent and 2.5-4.5 per cent next year. (MCOT online news)
Speaking of Prime Minister Abhisit Vejjajiva’s proposal to raise the minimum wage to a 250 baht daily rate, Methee Supapong, senior director of the BoT Domestic Economy Department, said that should the Tripartite Private-Sector Committee increase the minimum wage at a higher level than that of the core inflation, it would impact the expected inflation range between 2.5-3.8 per cent for this year.
With the inflation rate set to rise, the central bank will revise its inflation rate projection prior to a meeting of the Monetary Policy Committee, which is scheduled to take place on October 20, he said.
“The minimum wage, if adjusted higher than the core inflation level, will raise the inflation rate this year. But whether the rate will increase more than the inflation targeting depends on how much the wage will rise,” said Mr Methee.
Regarding the current baht appreciation, he said, the department would bring data on the baht rise, overall picture of the economy, and a summary of impacts of the stronger baht on the export sector and the Thai economy for consideration at the MPC meeting so that the committee could use them for its decision on the monetary policy direction.
The central bank projected the core and general inflation rates would stay in a range of 0.5-1.3 per cent and 2.5-3.8 per cent this year, and 2-3 per cent and 2.5-4.5 per cent next year. (MCOT online news)
