Argentina’s President Cristina Fernandez announced during a nationally broadcast speech on Wednesday a 16.9 percent increase in pension payments and a 22 percent increase in child subsidies to low-income families. This “social investment,” as described by President Fernandez, will benefit about 10 million people in both categories. This upcoming September the minimum pension will be $265 a month, and the monthly child subsidy will be $56 for each child in qualified households.
From an economic standpoint, the total impact the increase of these social measures will have on Argentina’s economy represents an expenditure of 1.35 percent of the country’s 2009 gross domestic product, a total of $315 billion. President Fernandez says the increase in social benefits will help sustain the nation’s demand of products and spur economic activity and consumption. This in turn will enable business-owners to produce goods and have capital to invest.
This announcement came at a vital time when opposition lawmakers are working to push through a significantly larger boost that would create a budget deficit equal to 8 percent of nation’s GDP.