Argentine lawmakers approved an austerity budget for 2019 on Thursday, cutting social spending and raising debt payments to meet conditions for expanded financing from the International Monetary Fund.
The budget approved Thursday by the Senate projects a 0.5 percent slide in GDP and a 23 percent inflation rate by the end of 2019, down from an expected 44 percent this year. It was approved earlier by the lower house.
The budget aims to cut the primary deficit before debt payments to zero — down from 2.6 percent of GDP this year.
Critics say it slashes social spending by 35 percent once inflation is accounted for. The expected blow to education, culture and housing outlays prompted street protests in the capital during the debate.
It also calls for a 50 percent increase in debt service payments in peso terms.
The cuts were called for in a $6.3 billion addition to a $50 billion IMF credit line approved in June.
IMF spokesman Gerry Rice told reporters in Washington that passage of the budget law was a “very positive step” that “points to a clear commitment by the Argentine authorities and a broad spectrum of Argentina's political forces to strength the country's economic policies.”
Rice also said that IMF chief Christine Lagarde is likely to meet Argentine President Mauricio Macri during the Nov. 30-Dec. 1 Group of 20 summit of world leaders that will take place in Buenos Aires.
Senators allied with former leftist President Cristina Fernandez voted against the measure, but it still passed, 45-24.
“What we are going to do with this budget is deepen the suffering of Argentine society, and it will be a useless sacrifice,” Fernandez, now a senator, said. “We all know that the recession is going to deepen.”
Pro-government Sen. Luis Naidenoff called it an “emergency budget” forced by economic problems that include a slumping GDP, high inflation and rising unemployment.