Argentina announces a special bonus for low-income residents affected by inflation

The Argentine government announced an exceptional aid for the less wealthy society in the face of the inflationary jump and summoned economic leaders to advance in the creation of a tax on unexpected business profits generated by the war in Ukraine.

In a presentation before businessmen, trade unionists and official politicians, the Minister of Economy Martín Guzmán was accompanied by President Alberto Fernández, who justified the measures in favor of informal workers, without a dependency relationship and retirees with minimum income.

“A bonus will be granted to compensate for inflation, making purchasing power grow (…) The war in Ukraine puts pressure on inflation and it is necessary to reinforce the income policy,” said the head of the Treasury portfolio.

The workers included in the measure will receive 18,000 pesos (about 158 ​​dollars) in two installments and retirees will receive 12,000 pesos (about 106 dollars) in one installment.

The fiscal cost that this will imply was not immediately reported.

The money would come from the so-called business “unexpected income” due to the effects on prices of raw materials generated by the Russian invasion of Ukrainian soil, which will require the approval of the National Congress.

The measure would cover firms with profits above 1,000 million pesos a year (about 9 million dollars).

Argentina announced last week inflation of 6.7% for March, the highest in two decades, and a price hike of 16.1% in the first quarter of the year, a record in three decades.

Last month, the Argentine government sealed an agreement with the International Monetary Fund (IMF) for the rescheduling of debt for some 44,000 million dollars, which implies monitoring the macroeconomic goals every three months.

Prior to his trip to the United States to participate in the spring meeting of the IMF, Guzmán maintained that the goals for the first quarter had been met: reduction of the fiscal deficit, lower monetary issue and accumulation of reserves from the central bank (BCRA).

“There is an urgency in the most neglected sectors of society (…) Inflation has local and international problems,” Fernández said at the public event.

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