BOGOTA (Reuters) -Colombia's minimum wage will increase by 9.54% in 2025, Colombia's President Gustavo Petro said on Tuesday, announcing the hike by decree after a deal was not reached between the government, business associations and workers unions.

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

The increase is smaller than the hike announced for this year. At the end of 2023, the government announced the minimum wage for 2024 would increase by 12%.

Business groups and unions had reached an agreement with the government over minimum wage increases for 2022 and 2023. A deal 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 will close this year at 5.3% before slowing to 3.1% by the end of 2025.

($1 = 4,395.44 Colombian pesos)