ARGENTINA’S Senate dealt a blow to President Javier Milei’s brutal austerity programme on Thursday when it pushed through an increase to pension spending that would cost at least 0.4 per cent of the country’s gross domestic product.

The bruising defeat for the far-right president again cast a spotlight on his weakness in Congress, which is controlled by opposition parties.

The Bill, which already swept through the lower house in June, passed the Senate in a 61-8 vote. All but one of the lawmakers who voted against the Bill were from Mr Milei’s party, a sign that the president’s allies had failed to negotiate with more moderate right-wing parties.

President Milei’s office said: “The Congress, in an act of demagogic populism, sanctioned an irresponsible, illegal and unconstitutional Bill that creates exorbitant expenses.

“The government will veto this project, because it is not afraid to pay the costs necessary to get this country out of the decadence in which it has been plunged.”

Lawmakers could override his veto by passing the law with a two-thirds majority again.

Because Mr Milei’s libertarian party controls less than 15 per cent of Congress and just seven of the Senate’s 72 seats the president has largely relied on sweeping executive decrees to slash public spending and deregulate Argentina’s economy.

Opposition lawmakers hailed the law, which includes cost-of-living adjustments for pension benefits to keep pace with the country’s dizzying 260 per cent annual inflation rate. 

Since 2017, the law’s supporters say, pensions in Argentina have lost 45 per cent of their value as prices soared.

The minimum monthly pension hovers around the equivalent of £177 while the basket of goods and services typically used to calculate inflation costs over £228 a month.

President Milei has suffered a series of defeats in Congress this week alone. On Wednesday, the government lost a vote in the lower house on its proposed spending increase for Argentina’s intelligence services.