Argentine President Macri Announces Economic Relief Package to Help Workers After Being Flounced in Weekend’s Presidential Primaries Hurts His Chances of Being Re-Elected in October; Peso’s Experienced Heavy Losses for 3rd Consecutive Day

  • Since Argentine President Mauricio Macri’s chances at re-election in October were dampened over the weekend by opposition centre-left candidate Alberto Fernández’s victory during the presidential primaries, Macri announced economic relief to help the country’s workers, but the announcement didn’t help stabilize the peso’s collapse.
  • Macri said in a video statement after the primaries: “The measures I take and that I am going to share with you now are because I listened to you. I heard what you wanted to tell me on Sunday.”
  • Macri’s package includes welfare subsidies and lower taxes for workers to help protect them during the country’s economic crisis. Additionally, Macri announced that petrol prices will be frozen for 90 days.
  • After the president’s announcement, “the peso opened 12.3% weaker at 61 per U.S. dollar,” but the currency “recovered slightly to be down 4.77% later in the morning.”
  • However, “it was the third consecutive day of heavy losses in the peso due to market concerns about politicians’ ability to drag Argentina out of another round of recession and high inflation.”
  • As part of the package, Macri said “he would raise the income tax bracket floor by 20%, paving the way for a tax cut for two million workers. The tax break will be about 2,000 extra pesos ($34) per month per person.”
  • Additionally, the Argentine government will provide 1,000 peso subsidy payments per child “to unemployed people with children before the end of the year and increase the minimum wage for the second time this year, although the size of the raise has not yet been determined.”
  • Macri said: “These are measures that will bring relief to 17 million workers and their families.”
  • After the weekend’s presidential primaries, the Argentine peso and stock markets collapsed on Monday due to fears that “Fernández could take Argentina back to populist economic policies.”
  • Macri became president in 2015 by vowing to invigorate “Latin America’s third-largest economy via a liberalization wave but inflation is at 55%, the country is in recession and the peso’s value is crumbling.”

Reference Links

  • France 24: Argentina’s president announces salary hikes and relief plan after poll setback READ
  • BBC: Argentina’s Macri unveils economic ‘relief’ measures after poll shock READ
  • Reuters: Argentina announces economic relief plan but peso still flailing READ
  • YAHOO!: Chastened Argentine leader offers help for workers, the poor READ

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