Minimum wage can be raised further without impacting inflation: BBVA

Mexico City. In Mexico there is still room for the administration to increase the minimum wage for workers, since the increases decreed throughout the six-year term have improved the purchasing power of families and there has been no impact on inflation levels, stated Eduardo Osuna Osuna. , vice president and general director of BBVA México, the bank with the largest presence operating in the country.

At the same time, the institution reported that in the first three months of the year, and as a result of a greater creation of reserves to reduce credit risks, it obtained profits of 25,499 million pesos, which represented a decrease of 0.9 percent. percent compared to the 25,732 million pesos reported from January to March of last year.

In a press conference, the banker considered that the purchasing capacity of Mexican families is still below what was reported in the 1980s, which is why there is still an opportunity to increase the minimum wage for workers who receive a formal income. .

“There is still room to increase the minimum wage, especially when we compare ourselves with the purchasing capacity of the 80s, we are still below that capacity.

It has already been shown that the increase in the minimum wage has not had an inflationary effect or an impact in terms of job creation, it has even been the other way around, what we have seen is that there are many areas with full employment and this has generated is that the wage bill as a whole is increasing, if the average wage in the formal sector rises, there is roomadded the manager.

Information from the National Minimum Wage Commission indicates that between 2018 and 2023 the minimum wage has grown 110 percent in nominal terms (without discounting inflation). This year, no one with a formal job should earn less than 248.93 pesos per day or 7,468 pesos per month.

Osuna expressed that the increases in the mini-salary in the country in recent years have favored the good dynamism of economic activity, since the income of families is higher and that allows them to have more resources to consume or save.

The minimum wage in Mexico, even with everything it has increased, is still one of the lowest in Latin America, the lowest in the OECD, and is still about 30 percent below what it reached at the end of the years. 70said Carlos Serrano, chief economist of BBVA Mexico.

Fall in profits

On the other hand, Osuna explained that the decrease in the institution’s profits is the result of comparative effects, at the same time that it created greater reserves to prevent the risks of non-payment related, especially with loans that are intended for families.

Provisions against credit losses are growing 43 percent. It is an interannual comparison. In the first quarter of 2023 we released many reserves that came from the pandemic crisis, especially in the business world, where we restructured and came from a portfolio that came from risk premium levels, especially in individuals, very low because we had taken losses during the pandemic.

Despite these results, the banker continued, in the following months the comparative effects will decrease, with which the generation of profits will once again be in positive numbers.

Even with the decrease, the Mexican subsidiary prevails as the one that contributes the most to the profits of the Spanish consortium, contributing 56.5 percent of the total profits on a global scale.

The balance of the credit portfolio reached one trillion 663 billion pesos, 9.1 percent higher than what was reported in the first quarter of 2023. The household loan segment (credit cards, personal financing, mortgages, etc.) reached 767 billion pesos, an increase of 13.1 percent.