• The tripartite national wage committee has resolved to raise the minimum wage rates for the year 2022, which will be proposed for the Cabinet’s approval to take effect on October 1, 2022. There are nine new minimum wage levels. The lowest rate is THB 328, and the highest is THB 354 (the current rates range from THB 313 to336), or an average increase of 3-7 percent. The move would be the first minimum wage hike over the past two years.
• The wage increase will be effective from the fourth quarter of 2022. Its impact on inflation this year is likely to be limited as many businesses are unprepared and cannot pass on most of their cost increases to consumers. KResearch maintains its projection for Thai inflation in 2022 at 6.0 percent. The forecast is also based on the impact of the wage hike. However, KResearch expects that labour cost pass-through to consumers would become apparent by next year. Thailand’s inflation in 2023 is set to be in a range of 2.5-3.0 percent, under the assumptions that the average Dubai crude oil price is at USD 95 per barrel, the actual minimum wage increase is in accordance with the Cabinet’s resolution, and there is no further change or adjustment of minimum wage in the next year. However, the minimum wage hike may prompt inflation to rise by 0.4-0.5 percent, compared to a no minimum wage increase scenario, under the assumption that other relevant factors remain unchanged.
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