Korea minimum wage U-turn, who will cut rates next?

Having hiked the minimum wage aggressively in 2018 and 2019, the Korean government earlier this week announced a very small increase in the minimum wage for next year. The policy shift comes in response to mounting evidence that the big hikes of the past couple of years have contributed to a downturn in the labour market, which has dragged heavily on consumption. Meanwhile, although we expect to see most countries in the region cut interest rates further over the coming months, one country we don’t expect to join them is Thailand. Earlier this week, the governor of the Bank of Thailand squashed speculation that the central bank would cut interest rates in order to reduce upward pressure on the Thai currency.