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Study plays down inflationary effect of govt pay rise

A Commerce Ministry study has found that increasing civil servants' salaries by 8 per cent would only add 0.05 percentage point to the inflation rate while driving domestic spending.

The ministry's Trade Policy and Strategy Office is confident inflation will be kept under control this year at 2-2.45 per cent.

The office's director Amparwon Pichalai said higher civil-servant salaries would not cause product prices to increase because the economy had just recovered. The move should benefit the economy and help stimulate domestic spending rather than cause an inflation problem, she said.

Meanwhile, General Chatchai Sarikanlaya, the National Council for Peace and Order's deputy chief for economic affairs, is chairing a joint Commerce Ministry-Bangkok Metropolitan Administration project to support 1,000 retail food shops in Bangkok and nearby provinces so they can sell cheap fast food at Bt25-Bt35 per dish.

Nai Ou, a shop in Bangkok's Sam Yan area, yesterday became the first to sell food under the scheme.

The ministry will supply cheap rice, sugar, cooking oil and seasoning to traders that join the project.

It has asked state banks, including Krungthai Bank and Government Savings Bank, to provide soft loans to the traders so they will have more liquidity to operate their shops.


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