BOGOTA, Dec 29 (Reuters) – Colombia’s government will raise the country’s minimum wage to 1.75 million pesos per month ($470), President Gustavo Petro said on Monday, a 22.7% increase.
The new minimum wage, which applies to around 2.5 million workers across the Andean nation, will come into effect in 2026.
Sign up here.
In a speech, Petro said the measure aims to reduce inequality and “democratize wealth so that working people, who make up the majority of the Colombian population, can live better.”
The hike more than doubles the 9.54% increase made this year, which brought minimum wages to 1.42 million pesos ($380), and marks the leftist administration’s last minimum wage hike before elections are held at the end of May 2026.
It also surpasses predictions for next year’s inflation, which central bank economists have estimated at 3.6%, down from the 5.1% projected for this year. Petro acknowledged the measure would put pressure on inflation.
Banco de Occidente chief economist David Cubides said he considered the increase “absolutely unsustainable” and that it would have effects across the economy including the government payroll, pension costs and the informal labor market.
“Inflation figures will have to be revised,” Cubides said. “Current forecasts for 2026 and 2027 fell far short, and in light of this, one would expect interest rates in Colombia to increase in the medium term.”
The new minimum wage was announced by decree after no agreement was reached between business associations and trade unions.
Petro also announced an additional transport subsidy for workers earning up to two minimum wages a month, which combined with earnings will bring workers’ total minimum remuneration to 2 million pesos per month.
($1 = 3,744.3000 Colombian pesos)
Reporting by Nelson Bocanegra and Luis Jaime Acosta; Editing by Tom Hogue, Shri Navaratnam and Thomas Derpinghaus
Our Standards: The Thomson Reuters Trust Principles., opens new tab