President López Obrador has announced plans for another increase in Mexico’s national minimum wage in 2023, which he expects to be around 20%.

AMLO made the announcement during a speech at Mexico City’s zócalo on Sunday, in which he presented the achievements of his fourth year in office during a rally to support the government.

“In a few more days, the increase in the minimum wage for next year will be announced; I want it to be agreed unanimously between the workers, business sectors and the government,” he said.

Discussions about the proposal have been taking place in the National Minimum Wage Commission (Conasami) since Thursday.

The current minimum wage is 172.87 pesos (US $8.95) per day across most of the country, and 260.34 pesos (US $13.47) in the Free Trade Zone on the U.S. border. The business sector has proposed an increase of 15%, while the unions propose an increase of 25%.

“I want it to be around 20%,” AMLO explained in his speech, “because that way, we would reach the end of our government with an increase of 100% in real terms throughout the national territory.”

Raising the national minimum wage by 15.6% per year was one of AMLO’s key policy commitments when he took office in 2018. At the time, it stood at 88.36 pesos per day – one of the lower wages in the Americas.

AMLO has mostly stuck to his campaign pledge, raising the minimum wage by 16.2% in 2019; 20% in 2020; 15% in 2021; and 22% in 2022. He also introduced a higher daily rate in 43 municipalities that make up the Northern Border Free Zone, aiming to improve the local economy and dissuade would-be migrants from leaving the country.

“[The minimum wage] went from 88 pesos to 172 pesos, an increase of 62% in real terms,” AMLO emphasized in his speech. “On the border, it has more than doubled. Never seen in 40 years.”

The real-term increase experienced by Mexico’s lowest-paid workers has been limited by rising inflation: core inflation reached its highest level in two decades in October, at 8.42%. Headline inflation is currently 8.14% in annual terms, according to INEGI, the nation’s statistics agency.

According to the newspaper Expansión, some economists estimate that Mexico will end the year at 8.5% inflation.

Mexico’s economic authorities are debating whether to raise interest rates to curb price rises, at the risk of slowing Mexico’s economic growth. The Bank of Mexico has already raised the benchmark interest rate by 75 basis points four consecutive times since June — most recently on November 10, putting the rate at 10%.

In his speech, AMLO insisted that Mexico’s Gross Domestic Product (GDP) would close 2022 at around 3.5% growth and continue this trend over the next two years. However, economic analysts propose a more conservative estimate of 2.7%, following a slowdown of industrial activity in the third quarter.

With reports from Infobae, Expansión Política and Excelsior