By Eliana Raszewski
BUENOS AIRES (Reuters) - Argentina's new government withdrew major spending reforms from a sweeping "omnibus" bill in Congress to facilitate its approval, the economy minister said on Friday, while stressing President Javier Milei's pledge to eliminate the budget deficit.
Economy Minister Luis Caputo announced the decision to scrap controversial provisions from the legislation, including pension and tax reform, implying that the libertarian Milei will seek tougher spending cuts elsewhere.
Milei's office described his commitment to a balanced budget as "unbreakable" in a statement after Caputo's remarks and argued that the removal of the bill's so-called fiscal chapter should guarantee its passage with lawmakers.
"The priority is for the law to pass," wrote analyst Salvador Vitelli in a post on X.
The announcement from Milei's economy chief marks a major concession as the government hopes to salvage the bill's prospects in Congress, where allies from other parties will be needed to enact the legislation.
The proposal had already faced stiff opposition, and the president's Libertad Avanza party only holds a small number of seats.
Milei, who took office last month, won a resounding election victory on a promise to rein in triple-digit inflation by dramatically downsizing the role of the government, including the privatization of state-owned firms and sharp cuts to a range of subsidies.
He has since pared back some of those promises - such as the privatization of state oil firm YPF - from the bill's text.
At a press conference, Caputo noted that inflation - which now stands at over 200% annually - has "slowed strongly" in the past two weeks, after a surge when the government pushed an early devaluation of the local peso currency last month.
He also said that his ministry would take control of the country's infrastructure portfolio, confirming earlier media reports that the government had moved to abolish the infrastructure ministry.
(Reporting by Eliana Raszewski; Additional reporting by Walter Bianchi and Kylie Madry; Editing by Anthony Esposito and Cynthia Osterman)