Colombia's Wage Decision Divides as Court Pauses Decree

In a significant economic development, Colombia's Council of State has temporarily halted the government's decree that raised the 2026 minimum wage by 22.7%. This move, announced on Friday, comes as the high court seeks a clearer explanation from President Gustavo Petro's government on the methodology used to arrive at the wage increase.

The high court has mandated the government to issue a new temporary decree within eight days, pending a final judicial decision. This decree must address the calculation methods under the 'vital minimum wage' framework introduced by Petro, aiming to ensure transparency and economic stability amidst rising inflation.

The substantial wage hike to 1,746,882 pesos monthly, effective 2026, has already prompted the Colombian Central Bank to raise interest rates to curb inflation. While the suspension doesn't confirm the legality of Petro's decree, it highlights the ongoing tension between economic policies and inflation control in Colombia.