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News > Latin America

IMF-Backed Budget Passes Argentine Senate Amid Protests

  • Demonstrators protest against the budget bill outside the Congress in Buenos Aires, Argentina, November 14, 2018.

    Demonstrators protest against the budget bill outside the Congress in Buenos Aires, Argentina, November 14, 2018. | Photo: Reuters

Published 15 November 2018

The 2019 budget was approved by the Argentine Senate. It is criticized for prioritizing payment of interest on the IMF loan while slashing social spending.

With 45 votes in favor, Argentina’s Senate approved the 2019 budget Thursday. The controversial budget proposes major cuts to the country’s health, education, culture, public works, and housing programs in order to guarantee payment of the interest on the International Monetary Fund (IMF) loan, critics say. 

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After 13 hours of debate, the Senate approved Thursday the budget presented by President Mauricio Macri. Of the 72 senators, only 24 voted against the measure and one abstained.

"Cambiemos (Macri's party) is only offering Argentines more austerity, precariousness, indebtedness, and recession," said Marcelo Fuentes, head of the Front for Victory block (FpV-PJ).

Senator and former President Cristina Fernandez said the 2019 measure is "a payment to the IMF". What this budget does, she added, "is make humble Argentines sacrifice, and it’s a worthless sacrifice."

Average Argentines have been paying the price of Macri's IMF-backed austerity measures since the president entered office in December 2015.

The administration laid off thousands of workers in its first four months and the layoffs haven’t stopped. Some 15,825 public sector workers were laid off in 2018 alone. This, coupled with a 42 percent inflation rate and a swiftly devalued peso, has pushed poverty rates to 27.3 percent in the first half of 2018.

Anti-budget protests took place outside of Congress as the debate began Wednesday. Several unions, including university professors, Argentina's Central Workers' Union (CTA) and political groups like the Workers' Party (PO) and the Socialist Left joined calls to reject the budget.

Spending for Latin America’s third-largest economy is set to total 4.1 billion pesos (approximately US$113.7 million) in 2019. The only spending item set to keep pace with an expected inflation of 35 percent is the payment on the IMF loan.

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According to Pagina 12, social service spending will decrease by 6 percent, culture and education by 23, housing and urban development by 48 percent, health care by 8 percent, and water treatment and sewerage by 20 percent.

Carlos Kalos, an Argentine economist and professor at the University of Sarmiento, agrees with Fernandez. He told teleSUR that the budget harms the country’s millions of vulnerable citizens slashing subsidies and social spending, calling the measure “a requisite for the IMF bailout” that now exceeds US$56 billion.  

The administration is hoping to reduce the primary fiscal deficit from this year’s 2.7 percent to zero next year.

Senator Jose Mayans (FpV-PJ) said the new budget will only hurt the economy which is already in recession.  

On the other hand, Senator Miguel Angel Pichetto of the Argentina Federal coalition said: "The budget is very important for the image of the country. The country is being watched by the IMF."

The country is also being watched by international investors, in whom Macri has deposited his hopes to prop up the Argentine economy.

Argentina will host another G20 summit conference at the end of November to be attended by IMF Managing Director, Christine Lagarde.

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