Argentina Taps Pension Fund Cash to Raise Payments to Poor Families By 23%
Argentina will boost payments to poor families with children by 23 percent as part of a program President Cristina Fernandez de Kirchner said is one of her biggest achievements ahead of elections in October.
Fernandez said today that the government will spend 11.8 billion pesos ($2.8 billion) on such aid this year after including an increase in the monthly stipend to 270 pesos per child or pregnant mother from 220 pesos. Funding comes from money seized by the government in its 2008 takeover of the $24 billion pension fund industry.
“We were able to implement this measure thanks to the recovery of the administration of the workers’ resources,” Fernandez said at the presidential palace in Buenos Aires. “This measure had an impressive effect in our society.”
Fernandez, who is leading polls ahead of the Oct. 23 elections, has tapped funds from the pension takeover to subsidize consumer loans, finance small and medium-sized companies and expand social programs, including one that gives laptop computers to school children. As of May, the investment fund that uses the pension industry assets climbed 30 percent from a year earlier to 189 billion pesos, according to the social security agency’s website.
The increase in Argentina’s Universal Child Allowance program, which benefits 3.6 million children and pregnant mothers, is in line with estimates of annual inflation by analysts including former deputy Economy Minister Orlando Ferreres. The government said prices rose 9.7 percent in July and has fined economists who dispute that estimate.
Fernandez, 58, is seeking to maintain a nine-year expansion of South America’s second-biggest economy. Gross domestic product will climb 6.6 percent this year after expanding 9.1 percent in 2010, according to the median estimate of six economists surveyed by Bloomberg.
To contact the reporter on this story: Eliana Raszewski in Buenos Aires at email@example.com
To contact the editor responsible for this story: Joshua Goodman at firstname.lastname@example.org