Argentina’s Milei to block pension reform in order to implement austerity measures | Business and Economic Updates

The Senate passed a pension increase in Argentina that matches the country’s high triple-digit inflation rate, defying President Javier Milei’s tough austerity program. Milei plans to veto the reform, which is likely to worsen the divide between him and the opposition-controlled Congress. The bill passed with a 61-8 vote, with Milei’s party being the main dissenters. The president’s office stated that the bill would require extra spending equal to 1.2 percent of GDP, contradicting Milei’s promise to maintain a fiscal surplus.
Milei, who took office in December, has faced challenges in Congress due to his party’s limited representation. His focus on austerity measures has led to clashes with lawmakers and protesters. The pension law, which aims to increase retirement benefits by over 8 percent, could deter investors and hinder Milei’s radical economic agenda.
Despite Milei’s efforts to achieve a fiscal surplus by cutting spending and halting public works projects, the country’s economic situation remains dire. The president’s confrontational approach and reliance on executive decrees have exacerbated the recession and poverty levels in Argentina. The decision to pass the pension reform has further highlighted the challenges Milei faces in implementing his policies and maintaining stability in the country.

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