BUENOS AIRES – Argentine President Cristina Fernandez announced Wednesday a 16.9 percent increase in payments to pensioners, aiming to preempt efforts by opposition lawmakers to push through a significantly larger boost.
A total of roughly 10 million people are expected to benefit from the pension hike and a 22 percent increase in child subsidies to low-income families.
Starting in September, the minimum pension will be 1,046 pesos ($265) a month, while the monthly child subsidy will rise to 220 pesos ($56) for each minor in qualified households, the president said in nationally broadcast speech.
She said the benefit hikes represent an expenditure equal to 1.35 percent of Argentina’s 2009 gross domestic product, measured at $315 billion.
“This increase helps sustain demand and guarantees for economic and social actors good prospects in economic activity and consumption, which is what business-owners need to produce and invest,” Fernandez said.
She said the pension hikes should be seen not as an added cost, but “a social investment.”
Her announcement comes as the congressional opposition is trying to pass a bill that would rely on a system of indexing to maintain pensions at 82 percent of median pay for active workers.
The opposition proposal would create a budget deficit equal to 8 percent of GDP and undo the gains from successive annual surpluses since 2003, Economy Minister Amado Boudou said Wednesday.
Fernandez’s Front for Victory coalition lost its congressional majorities in last year’s legislative elections, though it retains pluralities in both the Senate and the lower house. EFE