BOGOTA (Reuters) – Colombia’s minimum wage will rise 9.54% by 2025, Colombian President Gustavo Petro said on Tuesday, announcing the increase by decree after an agreement could not be reached between the government, business associations and labor union.

The minimum wage in 2025 will increase to 1.4 million pesos ($323.90) per month, said Petro, from 1.3 million pesos per month this year.

The increase is less than the increase announced this year. At the end of 2023, the government announced that the minimum wage for 2024 will increase by 12%.

Business groups and unions reached an agreement with the government on the increase in the minimum wage for 2022 and 2023. An agreement was not reached for the minimum wage this year.

The technical team of Colombia’s central bank forecasts annual inflation in Latin America’s fourth-largest economy to close this year at 5.3% before slowing to 3.1% at the end of 2025.

($1 = 4,395.44 Colombian pesos)