ARGENTINA: Pensions Rise Again for Inflation-Plagued Retirees

BUENOS AIRES (Reuters News), May 9, 2006: Inflation is hitting Argentinean pensioners hard. The government of Nestor Kirchner has announced that in June it will raise state pensions by 11 to 20.5%. This will be the 8th time pensions have been raised in the expactation that the rise will outpace inflation. Critics, however, say public spending should be curbed to slow price spiralling. Nestor Kirchner's government has decided to use its fiscal surplus to increase the spending power of retirees. Consumer prices jumped by 41% in 2002 following a devaluation of the peso. The new measure will cost $ 1.15 billion (900 million euros) a year and will be financed by the state pension agency fund. The minimum pension will rise by 20.5% while most pensions will increase by 11%. According to Carlos Tonado, the labour minister, the 8th rise in pensions reflects the government's commitment to sustaining decent standards of living among retirees. He also said that pensions had been raised by 213% since President Kirchner took office in May 2003. Nevertheless consumer prices are expected to rise by 12% this year. 3.3 million retirees will benefit from the new scheme.