BUENOS AIRES (Reuters)

Argentine President Javier Milei will veto a pension reform passed on Thursday by the Senate, potentially deepening the divide between the libertarian leader and the opposition-controlled Congress.

The Senate had overwhelmingly agreed to raise pensions in line with the country’s triple-digit inflation, a move that could jeopardize Milei’s commitment to strict fiscal balance.

Milei’s office stated that the bill’s “only objective was to destroy the government’s economic program,” as it would have necessitated an additional spending of 1.2% of gross domestic product.

“The president promised Argentines that he would maintain a fiscal surplus at all costs, and he will,” the statement from his office read.

Milei took office in December, introducing strict austerity measures aimed at combating rampant inflation amid rising poverty currently affecting half of the Argentine population.

Peronist center-left Senator Juliana Di Tullio, who supported the pension adjustment, highlighted that “55.5% of Argentines are in poverty and 17.5% are in extreme poverty. Many of them are senior citizens.”

Last week, Congress rejected a presidential decree intended to increase the intelligence budget, asserting that those resources could be better allocated to urgent social needs.