SANTIAGO, Chile, June 6 (UPI) — Argentina is showing signs of economic recovery, but growing unrest over austerity measures and cuts to healthcare, education and pensions continues to fuel tensions nationwide.

Retirees are among the groups most affected. On Wednesday, Argentina’s lower house of Congress approved a 7.2% pension increase, raised a monthly bonus to about $125 and reinstated a provision allowing people to retire without the required years of contributions.

But President Javier Milei has said he will veto the measure, arguing it threatens fiscal stability.

Retiree organizations, backed by labor unions, have held weekly protests outside Congress. These demonstrations have been met with police crackdowns under the government’s anti-protest protocol.

According to the National Social Security Administration, as of December, roughly 5.4 million retirees and pensioners receive less than $450 per month.

Even with bonuses and additional support, the minimum pension is around $600 — still below the estimated monthly cost of essential groceries for a family, which stands at $510.

Healthcare workers also have staged demonstrations against wage freezes and stagnant hospital budgets.

Garrahan Hospital, a national pediatric center that handles more than 600,000 consultations and 10,000 surgeries a year, led the recent protests.

The medical staff, technicians and administrative workers recently ended a weekslong strike after reporting a loss of up to 50% in purchasing power since December 2023. Resident doctors, who often work 60 to 70 hours a week, have been especially affected, with earnings now below the poverty line.

Public employees also have been impacted. Since taking office, the Milei administration has laid off about 43,000 government workers as part of a state downsizing plan.

The scientific community has also raised alarms over steep budget cuts. The National Scientific and Technical Research Council, Argentina’s top research institution, saw its budget fall by 20%. The National Atomic Energy Commission and the National Institute of Agricultural Technology reported cuts of 29% and 23.6%, respectively.

Public investment in education dropped by 43.8% in 2024, and public universities lost 25% of their inflation-adjusted budgets, triggering mass protests.

The government says many of the demands for more money are politically motivated, while official data shows concrete signs of economic progress.

Inflation in May hit its lowest level in five years, and private forecasts suggest it could fall below 2% monthly. That marks a sharp contrast with 2023, when annual inflation reached 211.4% — the highest in the world that year.

According to Argentina’s National Institute of Statistics and Censuses, or INDEC, the poverty rate fell to 38.1% from52.9% the first and second half of 2024. Extreme poverty dropped to 8.2% from 18%.

Still, experts warn that structural poverty persists. Eduardo Donza, a researcher with the Catholic University of Argentina’s Social Debt Observatory, estimates that about 25% of Argentines live in chronic poverty — particularly children and adolescents. More than 8 million children are believed to be living in poverty or extreme poverty.

As of December 2024, INDEC also reported an employment rate of 48.8%, with 6.4% unemployment and 11.3% underemployment.

The Organization for Economic Cooperation and Development projects that Argentina’s GDP will grow by 5.2% in 2025 and 4.3% in 2026, driven by rising private consumption, improved credit conditions and the lifting of capital controls.

The government has also highlighted recent achievements, including a $1 billion debt issuance and a renewed agreement with the International Monetary Fund.

Foreign trade has expanded, and a government campaign to encourage the return of dollars held outside the banking system has raised expectations for domestic investment.

Official estimates from INDEC indicate that by the end of 2024, Argentines held roughly $271 billion outside the local financial system. This figure includes cash kept at home, in safety deposit boxes and foreign bank accounts and other unregistered assets.

That amount is equivalent to about 45% of Argentina’s gross domestic product and far exceeds the Central Bank’s gross reserves, currently around $38 billion.

Looking ahead, the Milei administration faces growing demands to improve pensions, re-engage with the scientific and academic communities, and address budget requests from provincial governors — key players in advancing the government’s legislative agenda.

Meanwhile, Congress continues to move forward with privatization and deregulation plans, except for Aerolíneas Argentinas and Banco de la Nación, which were left out of the package.

With legislative elections set for October, the Milei administration is aiming to cement its economic gains while responding to urgent demands from sectors most affected by the cuts.