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 and 17 baht. The average rise was 11 baht, or 6.4 percent, the biggest in more than a decade.
Abhisit's party has pledged to raise the daily minimum wage by 25 percent 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," 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 percent at its next meeting on June 1, making it one of Asia's most hawkish.
Annual headline inflation rose to 3.14 percent in March from 2.87 percent in February while annual core inflation came in at 1.62 percent from 1.45 percent in February, compared with the central bank's target range of 0.5-3.0 percent.
January's increase took the daily minimum wage in Bangkok to 215 baht ($7.2) from 206, while on the tourist island of Phuket it rose to 221 baht, the highest in the country, from 204.
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