Wage hike wont' force prices up right away

Vatchari Vimooktayon, director-general of the Internal Trade Department, said large enterprises including Saha Group, which is the country’s leading manufacturer of consumer goods, had said it would not increase the retail price of any of its products.
She said enterprises had already improved their operational and production efficiency to offset higher labour costs. Producers would not raise prices immediately as it would affect their competitiveness.
However, producers of some items such as student uniforms want to increase prices. Uniform suppliers have submitted a request for a price rise to the department, as the product is on the price-control list.
Vatchari said the department would study the cost structure of student uniforms and decide whether to approve a price increase.
The ministry reported that about 100 retail shops nationwide had applied to join the government’s Thook-Jai Shop, a project to sell cheap essential goods to consumers.
The first shop should be opened to the public on April 19.
Meanwhile, a survey by the University of the Thai Chamber of Commerce (UTCC) indicates that in spite of higher wages, consumers are highly concerned about the rising cost of living. This could hurt consumer confidence in coming months, though currently it is on the rise according to the same survey.

CONSUMER CONFIDENCE INDEX
The results released yesterday show that the Consumer Confidence Index in March rose to the highest level in six months, from 75.5 points in February to 76.6 points.
However, that is still in negative territory – a number below 100 |indicates weak confidence. And Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, pointed out that the confidence index on the cost of living dropped to the lowest level in 20 months, and from 55.3 points in February, to 52.4 points in March.
The confidence index on future cost of living (in the next three months) also dropped last month from 75.7 to 72.9 points.
The overall improvement is attributed mainly to the government’s approval of a Bt1.62-billion budget aimed at reducing the cost of living, the pause in rises in the central bank’s policy rate, and signs of economic recovery, with gross domestic product forecast to grow by 5.5 per cent this year.
Thanavath said it was unclear whether confidence would continue to rise, given the many factors that could influence it down the road.

POSITIVE, NEGATIVE FACTORS
Positive factors include the higher Bt300 daily minimum wage and strong economic growth. But on the negative side are concerns on the rising cost of living, increases in fuel prices, and an unstable political situation arising from disagreement on the reconciliation plan. The index on the political situation dropped from 72.9 points in February to 71.1 points in March.
Thanavath said that although some consumers would have higher incomes, they were worried that their pay rises would be unable to keep up with the cost of living.
Wachira Kuntaweethep, a lecturer at the centre, said rising confidence continued to encourage consumers to spend more on durable goods such as new cars, houses and travel, and to start new businesses. He added that other indices related to consumer confidence also grew last month, though they remained below 100.
Based on a survey of 2,237 people, confidence in future income grew from 94.3 points in February to 95.6 points last month. The index on future employment opportunities rose from 66.7 points to 67.4 points.
The Commerce Ministry will hold a “Cost of Living Alleviation Fair for Thais” to run from tomorrow until Sunday at Impact Muang Thong Thani. The fair is projected to draw more than 400,000 shoppers and generate Bt320 million in sales.
Products at the fair will be 20-40 per cent cheaper than the normal price, which should save shoppers a combined Bt140 million to Bt150 million.