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Argentina's president defends austerity policies

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Argentina's president defends austerity policies
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Argentina's President announced a 46 percent increase in subsidies for poor families with children.

It was the only new initiative included in Mauricio Macri's heated State of the Union address as opposition lawmakers heckled him during his speech in Congress on Friday.

Elected in late 2015, the 60-year-old will be running for a second term in October and he has had sharp criticism for trying to slash the fiscal deficit by increasing taxes and cutting spending. The country has one of the highest inflation rates in the world.

"Since 2012 our country has not grown," said Macri.

"Today we are solving problems that are not circumstantial, they are structural. If we had not made the decisions we made, the economy would have collapsed," he said.

He has negotiated a standby financing agreement with the International Monetary Fund (IMF), worth €50 billion ($56.3 billion).

In response to the jeers from opposition politicians, he emphasised the progress he has made such as fighting crime and corruption.

Thousands of demonstrators marched in central Buenos Aires. Activists included union workers, social organisations and leftist groups opposed to Macri's fiscal tightening program.

Banners read "How about zero poverty" and "The people are hungry".