Increases to the daily minimum wage are unlikely to have a substantial effect on the domestic prices of goods and services, insisted the Commerce Ministry's planning unit.
Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office (TPSO), said the analysis conducted by the office on the impact of the minimum wage adjustment by the tripartite wage committee on inflation showed an average daily minimum wage increase of 2.37% to 345 baht would lead to a modest uptick in inflation, about 0.13–0.25%.
The impact varies depending on the labour-intensive nature of each industry, he said.
Industries with high labour costs will need to manage their costs more effectively, while products with high competition may experience minimal price adjustments. Manufacturers or business operators are likely to prioritise cost-saving technologies rather than passing on higher costs to consumers, said Mr Poonpong.
"The top five products and services most affected by the adjustment are processed food, rice, communication services, fresh vegetables, and fresh fruit. These products have a relatively high weight in inflation calculations and are associated with labour-intensive production sectors," he said. "The increase in the minimum wage will improve the purchasing power of low-wage workers and have a minor impact on overall inflation. It is considered a positive adjustment."
Mr Poonpong said the Commerce Ministry, which oversees fair and reasonable prices for goods and services, has continued to monitor product price movements. He said TPSO predicted a continued deceleration in inflation next year compared with 2023, ranging from -0.3% to -1.7%, with an average rate of -0.7%.
Factors contributing to lower inflation include government support measures, limited price adjustments for key commodities, a global economic slowdown, and high household debt, which may constrain consumer spending.
However, Mr Poonpong said factors supporting rising inflation include the expected return to normality for pork prices, increased production costs based on wage adjustments, high interest rates, the ongoing recovery of the Thai economy, and state measures to boost income and purchasing power.
He said risk factors for inflation include political instability, fluctuations in the value of the baht, and various government measures that could impact prices in diverse ways.