Argentina’s lower house of Congress unexpectedly rejected the government’s 2022 budget proposal, a blow to President Alberto Fernández as he enters the second half of his presidency.
After a marathon session that lasted over 22 hours, 132 lawmakers voted against the bill, 121 were in favour and one abstained. A new proposal would have to be sent toCongress, though the government could also extend the current budget with a presidential decree.
The vote was a defeat for Economy Minister Martín Guzmán, who spent several hours earlier this week discussing details of the budget in a congressional committee. It also adds uncertainty to Argentina’s negotiations with the International Monetary Fund to reschedule payments on over US$40 billion in debt.
A payment of US$1.8 billion is due to the Fund on December 22, as part of the current calendar that Argentina seeks to renegotiate.
“The vote reflects a more fragmented congress following the ruling coalition’s loss in the November 14 midterm elections,” said Tomas Arias, political analyst at XP Investments.
The budget proposal was questioned for months since it was sent to Congress in September. Fernández’s administration forecast inflation of 33 percent for next year, way below expectations that currently stand at 50 percent. Guzmán pencilled in four percent economic growth for 2022, while the IMF estimates it will be 2.5 percent.
by Patrick Gillespie & Jorgelina do Rosario, Bloomberg