Vietnam will lift minimum salary for state employees by 28.6 percent on Oct. 1, which is estimated to increase its state budget spending next year by more than 1.6 billion U.S. dollars, local media reported Tuesday.

Under a newly-issued government decree, the monthly minimum salary of people working in the administrative sector, armed forces, political and social organizations, and state-owned enterprises will stand at 450,000 Vietnamese dong (VND) (28.3 dollars), instead of 350,000 VND (22 dollars) currently, Youth newspaper reported.

Under the new salary scale, pensions for retirees, allowances, and social insurance will also be raised. The salary hike is expected to benefit 11.8 million people.

This is the third time that Vietnam has raised the minimum salary since 2003: from 210,000 VND (13.2 dollars) to 290,000 VND (18.2 dollars) in 2003, to 350,000 VND (22 dollars) in 2005, and to 450,000 VND (28.3 dollars) in October.

Vietnam has planned to increase gross domestic product (GDP) per capita to 1,050-1,100 dollars in 2010 from 640 dollars in 2005.

Source: Xinhua