BOGOTA (Reuters) – Colombia’s minimum wage will increase by 16% in 2023, President Gustavo Petro said on Thursday, higher than the previous wage hike.
The minimum wage will rise to 1.16 million pesos ($242.70) per month, an increase of 160,000 pesos ($33.40).
The wage increase comes amid rampant inflation in Latin America’s fourth-largest economy. Twelve-month inflation to the end of November hit 12.53%.
The increase followed agreements between business associations and unions, Petro said, and will benefit some 3.4 million people who receive the minimum wage.
“I hope that this increase to the minimum wage restores purchasing power that has been lost in recent months due to inflation, restores growth to the economy’s average productivity, and also allows us to boost internal demand in Colombia,” Petro said.
Growth in Colombia’s domestic demand could drive economic expansion, Petro said, taking growth beyond current forecasts, which are not overly optimistic.
Colombia’s economy is expected to grow around 8% this year, according to forecasts from the government and central bank, but growth could slow to 2% in 2023.
($1 = 4,778.28 Colombian pesos)
(Reporting by Luis Jaime Acosta; writing by Oliver Griffin; editing by Jonathan Oatis)