September 25, 2019 / 2:52 PM / 5 months ago

UPDATE 1-Mexico president says it' a myth that higher wages fan prices

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MEXICO CITY, Sept 25 (Reuters) - Mexico’s President Andres Manuel Lopez Obrador said on Wednesday that raising salaries does not increase prices for consumers, after inflation in the country hit a three-year low despite his government hiking up the minimum wage.

“This puts to rest the neoliberal-era myth. Why didn’t wages increase? What was the excuse? That said they were inflationary,” Lopez Obrador said at his daily press conference.

“This year the (minimum) wage increased more than at any point in the last 36 years and inflation is at its lowest in three years,” he said.

Mexican inflation fell to below the Central Bank target of 3% in the first two weeks of September, official data showed this week. Mexico’s economic growth has also slumped this year and the Central Bank is expected to cut interest rates at a meeting on Thursday.

Lopez Obrador regularly blames Mexico’s most salient problems, such as corruption, poverty and violence, on the policies implemented during the “neoliberal” era of pro-market policies starting in the 1980s. (Reporting by Anthony Esposito; Editing by Frank Jack Daniel and Alistair Bell)

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