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Minimum Wage Madness: Thai Developers Urge Caution in Unprecedented Hike – Could this Shock the Property Sector?

Worawut Kanchanakul, the president of residential development company W House, has expressed his thoughts on the new government’s approach to minimum wages. He believes that a gradual increase in the minimum wage would be more beneficial, as businesses would have the opportunity to adjust their operations to accommodate higher construction costs.

Worawut emphasized the importance of the new government addressing cost of living concerns as a priority. He also expressed his hope for a smooth government formation process to boost confidence among domestic and foreign investors. Although he anticipates the establishment of a new government by August, a delay beyond this timeframe could negatively affect businesses and government spending. “If the new government arrives sooner, many problems could be resolved quickly,” he said.

Wichai Wiratkaphan, a Government Housing Bank inspector and acting director of the Real Estate Information Centre, shared his concerns about potential delays in forming a new government. Such delays could postpone the approval of the government budget for the fiscal year 2024, posing a risk to the property sector and Thailand’s GDP. “It is hard to tell how fast the economy will recover because politics is a sensitive matter,” Wichai commented.

According to Wichai, the new government should carefully evaluate the consequences of increasing the minimum wage. A sudden hike in wages might result in increased costs for small businesses and a reduction in job opportunities. However, he does not anticipate negative effects on the property sector due to the implementation of a minimum wage increase, given that most developers pay their workers above the current minimum wage. “We believe that the new government will increase the minimum wage appropriately, not in one immediate increase,” he expressed.

Similarly, Peerapong Jaroon-ek, president of the Thai Condominium Association, hopes for the swift and smooth formation of a new government. He urged the new administration to implement economic stimulus measures as soon as possible to aid economic recovery. “I want the new government to increase the minimum wage gradually,” he said, explaining that a sudden rise could provoke inflationary concerns.

In conclusion, the voices of these prominent figures in Thailand’s property sector signal the importance of a gradual, well-considered approach to increasing the minimum wage under a new government. Their insights emphasize the potential consequences for businesses and economic growth if such measures are not carried out thoughtfully and effectively.

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