PAY demands are likely to remain at double-digit levels this summer, according to labour experts, despite inflation falling to a five-year low. The secretary of the Federation of Trade Unions, Mr Pang Kin-pan, said that while the slowdown in price rises was ''heartening'', higher monthly inflation rates earlier in the year still had to be considered when companies awarded salary increases in July. He was supported by the spokesman for the Institute of Personnel Management, Mr Patrick Maule, who said employers would use the level of wage increases awarded at the beginning of the year as a benchmark for summer awards. Many companies that have yet to decide on pay increases use the March inflation figures in their calculations. They include Hongkong and China Gas, China Light and Power, Hongkong Telecom and Hongkong Electric. ''Hongkong has suffered from inflation rates which have reached 10 per cent this year and are likely to go back up to that sort of level again before the end of 1993,'' Mr Pang said. Unions negotiating mid-year deals for their members would want parity with those who had already been awarded rises at the beginning of the year. ''Companies who have agreed pay deals of about 12 or 13 per cent at the start of the year are often in the same business as those who give their increases in July, so why should workers in these companies suffer because they have to negotiate later in the year?'' he said. Mr Maule said a survey of 50 companies that had announced pay rises for their employees at the start of 1993 revealed average wage rises of about 12 per cent. Some of those who have already struck new pay deals include Cathay Pacific and Hongkong Bank. The airline paid an average increase of 11 per cent, while the bank's non-executive staff were given a rise of about 12.5 per cent. ''The vast majority of companies who delay their increases until July will base their rises on what other companies have done earlier in the year,'' Mr Maule said. ''This latest news on inflation is good, but it's too soon to say that there is a trend developing. Companies will use both the performance of the CPI and the salary data in determining pay increases but the major factor in most cases will be what other people have paid this year.'' Mr Maule said that if inflation remained at its current level while pay rises were still in double figures, salary increases would become a major force in pushing inflation back up again. ''Double-digit pay is an adverse situation to have when there is controlled inflation, but I am not sure if we have reached that stage yet.'' Hongkong General Chamber of Commerce chief economist Mr Ian Perkin called for further wage restraint and said the salary increases should be limited to levels close to the rate of inflation. ''Part of the fall in inflation is due to the stand taken on wage increases early this year. We would like to see the mid-year awards on the same level with inflation, or at worst, one to two per cent above that. ''If everybody takes a moderate rise now, we will all be better off.' in 12 months' time.''
