Colombia hikes 2026 minimum wage up nearly 23 per cent

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 per cent increase.

The new minimum wage, which applies to around 2.5 million workers across the Andean nation, will come into effect in 2026.

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 per cent 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 per cent, down from the 5.1 per cent 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.