The Employers’ Confederation of the Mexican Republic (Coparmex) recognized this Wednesday that the pact between businessmen and the Government contained the inflationbut warned of cost increases in 2023 due to the rise in the minimum wage and the entry of labor reforms.
The employers perceive “good news despite the fact that” the general inflation of 8.14% per year in the first half of November is “high”, according to José Medina Mora, president of Coparmex, in an interview with EFE in Playa del Carmen, in the Mexican Caribbean.
We had (in inflation) already reached 8.7% (in September) it dropped to 8.4% (in October), we will close the year with high inflation, but all of 2023 will go down, but very slowly, the expectation we have is that we could close 2023 between 4% and 5%”,
added.
For Medina Mora, the unity agreement between the Government and the business sector was an important factor in preventing inflation in Mexico from skyrocketing.
Mexican President Andrés Manuel López Obrador first promoted a “Package against inflation and famine” (Pacic) last May and then an “Opening Agreement against inflation and famine” in October for businessmen to commit to not raise basic products.
If the agreement had not been reached, we would be talking about double-digit inflation between 12% and 13%, so it has been worth it ”,
commented the leader of the employers’ association.
A “difficult” 2023 with more costs
Even so, the sector representative argued that the start of 2023 will be difficult for companies because three increases in their costs are combined.
These are the increase in the minimum wage, the reform that takes the minimum vacation days from six to 12, and employer contributions for pensions, which go from a proportion of 6.5% to 15%.
It will be a difficult stage for companies because three increases in costs come together: the minimum wage increases, vacation days increase, which has a consequence on the vacation bonus, and the days that people who are on leave have to be replaced. holidays”,
pointed.
The National Commission for Minimum Wages (Conasami) will announce this Thursday the increase in the basic salary, which is now 172.87 pesos a day (8.6 dollars).
Coparmex had proposed a 15% increase, but López Obrador assured that “there is a will” to increase it by 20%.
lagging growth
The business leader also regretted that “Mexico is the only country in Latin America that has not recovered the level of its economy prior to the pandemic”, after the 8.2% contraction of the gross domestic product (GDP) in 2020 and the insufficient recovery of 4.8% in 2021.
In other Latin American countries there was support for economic reactivation that in Mexico it was decided not to give, they did not want to protect employment, they did not want to support micro and small businesses with credit, it was born in a very limited way from the first year and then nothing and now we are paying those consequences”,
added.
One of the factors, he explained, is the lack of investment from the Government, which should be 5% of GDP, but is at 2.8%, according to his calculations.
We have not recovered the level of the economy because there is not enough investment from the Government and it is not diversified and there has not been investment from the business sector in many cases because they are not authorized ”,
lament.
In particular, he highlighted the paralysis in the energy sector, in which López Obrador has made changes to favor state companies.
We do not take advantage of the opportunities, we do not have enough energy and less clean energy and there are companies worldwide that have said that they are only going to invest in those countries where they are guaranteed to have clean energy”,
concluded.
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