(Bloomberg) — Mexican President Claudia Sheinbaum said she plans to raise the minimum wage by about 12% in 2025 and beyond, an increase that would be well above inflation in Latin America’s second-largest economy. lie.
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Sheinbaum’s goal is to raise the minimum wage until it covers the cost of about two and a half basic food baskets, she said Thursday at her daily news conference. Annual inflation stood at 4.66% in early September and the central bank is targeting a 3% increase in consumer prices, plus or minus one percentage point.
“We worked with economists on this at the time so that it doesn’t affect inflation,” Sheinbaum said, adding that most business people who discussed the proposal with her administration agree.
Mexico’s central bank has cut its benchmark interest rate at each of its last two meetings and signaled that more cuts are on the horizon. Policymakers started easing later than regional peers, partly due to stronger-than-expected economic growth and higher government spending ahead of the presidential elections in June.
However, Sheinbaum’s minimum wage increase proposal would be smaller than the last increase ordered by her predecessor, Andres Manuel Lopez Obrador, who increased basic pay for workers by 20% this year.
The Mexican minimum wage is agreed upon by the government, unions and companies.
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