BUENOS AIRES (Dow Jones)–Argentina will sharply raise the minimum payment under a popular children’s welfare program, President Cristina Kirchner announced Wednesday, helping to ease the pain of steep inflation.
The minimum payments will be raised almost 23% to 270 pesos ($64) per child per month, adding ARS2.2 billion to government entitlement spending, Kirchner said.
Total outlay for the Universal Child Allowance, which is partly financed by the World Bank, will climb to ARS11.8 billion per year.
About 3.6 million children and 1.9 million families will benefit from the increase. Total welfare spending for the poor will rise to ARS34.5 billion per year.
Argentina is «one of the best countries in the world in covering our children. It makes me very proud,» Kirchner said.
The program provides a monthly stipend to poor families which document their children are in school and receiving basic medical care, both of which are taxpayer funded.
«The social and economic impact of these programs is quite substantial… resulting in a significant reduction of poverty and extreme poverty in Argentina,» the World Bank said in a March statement.
While the increase is hefty, inflation is running at over 20% a year due to brisk economic growth, high government spending and loose monetary policy, according to economists.
Leftist President Kirchner has sharply boosted spending on social programs and public works ahead of October presidential elections. The popular president is expected to win re-election by a wide margin.
The president said the poverty rate in the country has fallen to just 8.3%, while the indigence rate was down to just 2.4%. That’s in stark contrast to the 54% poverty and 27.7% indigence rate seen in 2003 when Kirchner’s husband and predecessor, Nestor Kirchner, assumed office. At that time, the economy was still on life support after the 2001 economic meltdown.
While many economists accuse the government of manipulating poverty figures, there has been an undeniable drop in unemployment and poverty after rapid economic growth in recent years. Gross domestic product has expanded more than 6% in seven of the past eight years and is expected to grow by 8.2% this year, according to the government.
Source: online.wsj.com