BANGKOK Thailand will set a new daily minimum wage by the year's end, its labour minister said on Friday, but it would not be 400 baht ($11.18) baht as previously stated.

The raising of the daily minimum wage, a key plank of the ruling Pheu Thai party's election platform, has rattled businesses over concern it would push up operating costs and make Thailand less competitive for investors at a time when the economy remains sluggish.

Labour Minister Pipat Ratchakitprakarn told reporters the rate of the hike would still be higher than inflation. The average daily minimum wage is currently 337 baht.

Annual headline CPI in Southeast Asia's second-biggest economy was 0.88% in August.

The new government has announced a raft of populist policies seeking to boost the economy and cut living costs, key campaign promises after taking power last month.

Key measures include a 10,000 baht ($284.58) handout via digital wallets for each person aged 16 and over to spend in their communities, worth 560 billion baht ($15.94 billion). ($1 = 35.14 baht)

($1 = 35.7800 baht)

(Reporting by Satawasin Staporncharnchai; Writing by Orathai Sriring; Editing by Martin Petty)