Argentina’s government has passed a reform to the pension system on Tuesday, after days of demonstrations by the bill’s opponents and violent clashes between protesters and police.
The law changes the formula used to calculate benefits by linking them to consumer prices instead of tax income and wage hikes.
The government says that will make benefits more predictable and sustainable, and they will still increase by more than inflation next year, reports Reuters.
“This formula guarantees that over the next few years, retirees will never lose against a jump in inflation,” said Macri, who took office in December 2015 after more than a decade of populist rule.
Macri tweaked his proposal, pledging a one-time bonus payment to the neediest retirees, after clashes last Thursday derailed congressional debate.
Still, the measure generated fierce criticism from opposition lawmakers and labour unions, who say it will hurt retirees.
The debate prompted demonstrations on Monday. Thousands took to the streets of the capital Buenos Aires and around the country, banging pots and pans and blaring car horns.
Economists, noting that inflation expectations are lower, said linking benefits to consumer prices would lower spending by around 0.5 per cent of gross domestic product (GDP) next year.
Argentina’s government is aiming to cut the deficit to 3.2 per cent of GDP from 4.2 per cent currently.